The 40 Year and 80-20 Mortgage [mortgagecalculator-tips.blogspot.com]
Readers ask questions, and our real estate expert answers. This week, Stephanie from the Northwest Side asks whether she should save for a down payment or opt for alternate loans and pay private mortgage interest.
mortgagecalculator-tips.blogspot.com Deal Estate Questions: Dennis Rodkin Discusses Saving for a Home Versus Alternate Loans and PMI
Fresno, CA -- (SBWIRE) -- 06/20/2012 -- California HARP Mortgage Lenders refinanced 21677 (1.03%) of the state's 2107984 Fannie Mae or Freddie Mac underwater mortgages in the first three months of 2012, according to the Federal Housing Finance ... 2012 ... California HARP Mortgage Lenders to Help 2.1 Million Underwater Homeowners ...
Many of my clients keep asking me about the 40 year mortgage and the 80 20 mortgage and while these two kinds of mortgages are similar in many ways, they are also very different as well. The 40 year mortgage is supposed to lower your monthly mortgage payments while the 80 20 mortgage will increase your monthly payments because of the addition of the second mortgage. Both the 40 year mortgage and the 80 20 mortgage are fairly extravagant mortgage products that will only be utilized by a minority of home buyers across the nation. Despite this, they are both growing in popularity at a tremendous rate and it is always best for any home buyer that may be thinking about either product to first become educated about its fundamentals before any action is taken.
The 40 year mortgage is actually not that difficult to understand and it is really what its name entails it to be-a 40 year mortgage product that is instead made for 40 years instead of only 15 or 30.
The 40 year mortgage is supposed to give people a lower monthly payment due to the extension of the repayment term and it does deliver in this regard if you look at it from a certain angle. While it does lower a person's monthly payment by a certain amount, it often does not lower it by a significant amount after all is said and done. This is because the 40 year mortgage usually comes with a slightly higher interest rate than the more conventional 15 or 30 year mortgages and when you compare the two the 40 year mortgage only beats out the more conventional mortgage loans by a small difference. You need to be careful to run the numbers before you decide on this mortgage product as many times the cost savings it provides are a bit of an illusion.The 80 20 mortgage is different from the 40 year mortgage in that its loan term is for more traditional time periods such as for 15 or 30 years and not 40.
The 80 20 mortgage essentially allows a person to come up with one hundred percent financing for their home purchase by allowing them to take out a second mortgage on the property for up to twenty percent of the price of the home. This will give the home buyer an 80 percent first mortgage, and a 20 percent second mortgage on the property, and for many home buyers this is exactly the kind of financing they need to purchase their home. Do your homework on whatever mortgage loan product you end up going with and in the end you won't get deceived and you'll walk out of the closing with a smile on your face. Related The 40 Year and 80-20 Mortgage Issues
