There are countless ways that home loans can be structured when purchasing or refinancing a home in Dallas or anywhere in the country for that matter. One of the unique programs that has been around for years is a combo loan, typically seen as an 80-10-10 mortgage or 80-15-5 mortgage. This means the overall loan is broken up into 2 separate loans. The first loan is 80% or less of the purchase price or value of the home and the second loan covers the difference after taking into account your down payment or home equity. This strategy can also be used to avoid a jumbo loan amount.
For example, a $500,000 purchase price with 5% down could be structured with a first loan of $400,000 and a second loan of $75,000 for a total loan to value of 95% (80/15). Depending on your unique situation, there can be many advantages that come from this type of home loan structure.
The 80-10-10 mortgage, 80-15-5 mortgage and other combo loan options can be a great tool and home loan strategy for the right person. Like other home loan options, there can be advantages and disadvantages. The only way to truly know what the best home loan is for you is to have your mortgage lender prepare a Total Cost Analysis that compares each home loan option side-by-side so you can see how each scenario impacts not only your monthly payment and out-of-pocket expense, but also the short and long-term benefits of each option.
If you’re interested in finding out which home mortgage is best, we invite you to apply online or call us today at 972-499-0454. One of our experience mortgage planners can help you determine which option is best for you. The review will take only minutes, but could save you thousands of dollars by helping you choose YOUR best home loan.
Updated: January 10, 2017