It’s back… the 80/10/10 mortgage program which allows home buyers to put just 10% down and avoid having private mortgage insurance via a second mortgage/home equity line of creedit. The second mortgage/home equity line of credit technically does not have to be at 10% with the first mortgage at 80% of the loan to value (sales price). Often times, the mortgages may be structured around conforming loan limits, as long as the total combined loan to value is 90%.
Here are some of the program requirements:
- total combined loan to value limited to 90%.
- first mortgage limited to conforming loan limits (including conforming high balance).
- credit scores must be 740 or higher.
- single-family detached dwellings only.
- primary residence – owner occupied only.
- maximum debt to income ratio is 43%.
- purchase transactions only.
This is just another option for you to consider if you are buying a home with 10% down payment. I recommend comparing this to a scenario with private mortgage insurance to see if this fits your financial scenario.
If you are interested in buying a home located any where in Washington state, where I am licensed, please contact me – I am happy to help you!