This combination loan uses an 80% first mortgage and a
20% second, and requires no mortgage insurance. It allows for
higher debt ratios and there are no income
limitations.
This is a great loan for someone that makes too much
money for first-time homebuyer programs, but still needs a no down
payment loan. In a purchase transaction, a second trust is
frequently used in combination with a first trust to avoid paying
Private Mortgage Insurance or PMI. The first trust is always set at
80% of your purchase price which eliminates the need for PMI. We add
a second trust of 20% of the purchase price or value.
Advantages:
Your entire payment is tax deductible (mortgage
insurance is not) You may decide to pay off your second early
reducing your total payment.
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