LOAN INSURANCE

LOAN INSURANCE

These types of loans are often referred to as 80-10-10 loans or 80-15 loans. An 80-10-10 loan is a mortgage at 80% of the amount to be financed and than two home equity loans at 10% each. You will likely find that all three loans will have a different interest rate with this type of package. 80-15 loans are similar but would be the main loan at 80% and a secondary loan at 15% with the buyer putting down the additional 5%.It is important to note that when financing 90% - 100% of a home, the appraisal will play a key role in the loan approval process. If the appraisal does not come out at a pre-determined amount.You may need to go back and renegotiate the purchase price of the home or run the risk of being denied the mortgage. Most real estate contracts, do have a clause in them that allows the buyer out of the contract if they are denied a mortgage.You will want to speak to the lawyers and real estate agent in advance if you are planning for applying for this type of loan.