80 20 Loans

Jeff Said:

Does anyone know of any lenders who still currently do 80/20 loans?

We Answered:

Yeah, you can try lehman brothers bank, Aurora. I think they are the only bank right now that are doing the 100% finance

Rosa Said:

Do 80/20 Loans Exist for Multifamily Investment Property?

We Answered:

The rules that apply to residential lending are not the same rules that apply in investment lending. This is the surprise that a lot of people get when they start trying to buy investment properties.

Truthfully, it will be very difficult to find and arrange and 80/20 loan for and investment property. I'm not saying it is impossible, but very verry very difficult. I am assuming that the Multi-Family is a duplex, triplex or four-plex. On larger properties of 4+ units, they usually want 30% down.

Also, if you do find a primary lender that will lend you the 80% they may nix letting you arrange financing for the remaining 20%. All financing arrangements must be disclosed during the closing or the underwriters may kill the deal if you try and get around this.

There may be creative financing techniques that might help. Get the seller to pay all closing costs, ask for a credit for repairs that need to be made. These could save you 5-6%. Also some lenders will allow a small seller carryback loan of 5-10%.

Good Luck

Danielle Said:

80/20 Loans still around?

We Answered:

An 80/20 loan was actually TWO separate loans. The 'primary' mortgage was for 80% of the home price. A separate 20% 'home equity loan' covered the 'down payment' on the 80% loan. In todays market. NO ONE will give a primary OR equity loan without REAL equity, which does not exist with an 80/20 loan.

Tracey Said:

Bankruptcy and 80/20 mortgage loans?

We Answered:

with a chapter 7 or 13 there is no way to get rid of mortgage debt (1st or 2nd)...

you should be able to keep your home, but you will still have both mortgages. But if you are asking if you only make payments to the first mortgage and not the second will be be able to keep you home the answer is no, they both have a lien on the title/deed to your home and either has the ability to foreclose.

Oscar Said:

Do they still have 80/20 loans with 100% financing with no PMI anymore?

We Answered:

Yup, they are still out there. Companies are still making those loans but the guidelines are becoming more strict. Credit scores and debt/income ratio qualifications have been raised. The investors on the secondary market want to see strong loan packages with less risk. I just noticed you are in CT. I can only speak for Ca.
If I were you I'd start with Quickenloans or Countrywide. You can put out a request on Bankrate.com as well.

Dwayne Said:

why do lenders offer 80 -20 loans compared to regular loans?

We Answered:

Usually it's to benefit the applicant by by-passing PMI (primary mortgage insurance). PMI is required unless you have at least 20% of the mortgage (loan) to put down and you pay PMI monthly until you reach the 20% paid off mark. My PMI is about 10% of my monthly mortgage bill every month (and it's a waste of money). That's why they offer an 80% loan and a supplemental 20% loan. But if you consider an 80-20 loan each loan may have a different interest rate, so ask your broker. The convention 100% loan with the PMI may be cheaper over time then paying a higher interest rate on the 2nd (20%) loan. Or if you have the 20% to put down on the mortgage, then you should just stick with the conventional loan.

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