<\/span>Example of an 80-10-10 mortgage<\/span><\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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If a family wants to purchase a home for $200,000, and they have made a down payment of $20,000, which is 10% of the total home’s value. <\/p>

They will need to pay PMI over and above their monthly mortgage payments if it is a conventional 90% mortgage. The 90% mortgage will also generally carry a higher interest rate. <\/p>\n

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Instead, if the family can take out an 80% mortgage at a lower interest rate, for $140,000, and avoid the need for PMI. <\/p>

At the same time, they can take out a second mortgage of 10%  for $20,000. Which could be a HELOC. <\/p>

The down payment will still be 10% but the family has completely avoided PMI costs, got a better interest rate, and as a result have lower monthly payments.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/span>Conclusion<\/span><\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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During the housing boom, the growing home prices and lenient underwriting standards made 80-10-10 types of loans widely available.<\/p>\n

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An 80-10-10 mortgage is designed with two mortgages – the primary being a fixed-rate loan at 80% of the home’s cost; the secondary being 10% as a home equity loan; and the balance 10% as a cash down payment.<\/p>\n

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These mortgage plans reduce the down payment of a home without the borrower having to pay private mortgage insurance (PMI), and thus helping home seekers to obtain a home more easily with the up-front costs. <\/p>

The borrowers however will have to face comparatively larger monthly mortgage payments and if interest rates increase they may have higher payments due on the adjustable loan.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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\n\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\tOnline Mortgage Calculators<\/span>\n\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

What Is an 80-10-10 mortgage? When first and second mortgages\u00a0are obtained simultaneously in a loan it is called 80-10-10 mortgage.\u00a0 The primary mortgage\u00a0lien is taken with 80% of the home’s cost hence it is an… Continue Reading What Is 80-10-10 Mortgage? – Its Advantages And Disadvantages<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":10636,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[36],"tags":[1901,1905,1904,1902,1903,47,53],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.compareclosing.com\/blog\/wp-content\/uploads\/2021\/08\/What-Is-80-10-10-Mortgage-Its-Advantages-And-Disadvantages.jpg","_links":{"self":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/10630"}],"collection":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/comments?post=10630"}],"version-history":[{"count":5,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/10630\/revisions"}],"predecessor-version":[{"id":10651,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/10630\/revisions\/10651"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media\/10636"}],"wp:attachment":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media?parent=10630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/categories?post=10630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/tags?post=10630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}