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Christy Said:

Have 80-10-10 mortgages and 80-15-5 mortgages gone away entirely due to the credit crisis?

We Answered:

Yes, these loans are gone.

The reason for 80/10/10 or 80/15/5 were to save the monthly PMI.

You can still do 5% or 10% loans. However, you have PMI. BUT it is now tax deductable.

Bonnie Said:

Selling property to a LLC, bank will loan 80% Buy wants 90%. Second mortgage 10% I need personal guarantee.?

We Answered:

absolutely ... and from every owner of the LLC. Plus proof that those persons are the only owners. and a requirement that no transfer of the ownership of the LLC will take place without all new owners also guaranteeing the debt (penalty -- becomes immediately due and payable in full).

without the personal guarantee, the LLC owners could burden it up with debt to the point that your second is meaningless and completely noncollectable.

then, you need to run the credit of every owner -- someone in the whole bit has to have reasonable credit or you're being asked to finance a speculator.

Bessie Said:

How much house can I afford???

We Answered:

How ever much you feel comfortable with. No law says you need to buy a house that costs the maximum you can afford. Balance what you'll be comfortable living with and making payments on.

Tyrone Said:

How can you pay off a mortgage in 10 years on an $80,000 home?

We Answered:

pay more money than is due and apply it to the pricipal amount. The loan payment on an $80K house is extremely low...shouldn't be too hard to apply some extra cash. Also, you can refi it to a 15 year mortgage (not sure that they have 10 year ones) and get a better interest rate as well.

edit: I didn't think of it initially, but there are some good answers here...what is the motivation for early payoff....investing the extra money is a good option if you will get a better rate of return.

Marie Said:

how does an 80 10 10 mortgage work?

We Answered:

Let me add...

Don't be afraid of Private Mortgage Insurance. Things are quickly changing in the lending industry. For many borrowers, PMI will be the better choice. Make sure your loan originator works the numbers with PMI so you will know which works best for you.

The lenders who were gung-ho on the 80-10-10 are dropping like flies. Twenty-three of them in the past two months have disappeared. The web site http://www.ml-implode.com has an Implode-O-Meter and information tracking this. Why have the lenders gone under? Because people default on the loans. Why do people default? Because the loans are set up for the people to fail.

There are several ways to pay for PMI. Monthly is the most common, but it's usually the most expensive. There are two other options that bring the price way down: Lender Paid or Financed. With lender paid, the lender ups the interest rate ont he loan slightly and pays for the PMI. With financed, you pay up front, but roll it into your loan. It will usually up your payment about $12/month per $100k borrowed.

And remember, PMI is usually tax deductible now. And only having one loan means you can easily get a home-equity loan down the line.

Finally, if you qualify for Fannie Mae's MyCommunityMortgage product, which is either based on income or the neighborhood where you're purchasing, the PMI is cheaper. Much cheaper. (Freddie Mac has a version, too.) Ask your loan originator if you qualify. This is new, and many loan originators haven't heard about it yet. Tell yours to go to the Fannie Mae web site to learn more. Or you go there: http://fanniemae.com.

Good luck.

Darrell Said:

I need a spread sheet that will calculate a 80/10/10 home mortgage loan for me. Can you help?

We Answered:

you can do this in excel. you the rate function. you'll need do one rate calculation for each loan. then sum the payments.