Interest Only Combo 80/10/10 Loans

Whether purchasing or refinancing your home, you can build your equity (i.e. pay down your mortgage) faster by NOT using a loan that requires private mortgage insurance in the structure of your financing. This is best accomplished with a "Piggy-Back" mortgage.

Private mortgage insurance (PMI) enables you to buy a home with less than a 20 percent down payment. Likewise, it allows refinance loans with less than 20 percent equity in your home. Though PMI allows many people to obtain financing, the added monthly cost can be significant. The portion of your monthly mortgage payment attributed to PMI is like paying rent because paying this money benefits someone other than you.

The Piggy-Back mortgage is simply an additional (2nd) mortgage that represents any amount financed ABOVE the 80% Loan-To-Value level. A first mortgage is written for 80% of the loan-to-value amount with the second mortgage written for the remaining loan amount requested. This prevents the need for PMI. An additional benefit is that ALL of your monthly payments go to the reduction of principle (on your 2 loans) and may be tax-favored. PMI doesn't give any tax advantages and the money paid for it simply vanishes every month.

More purchasing power with a lower 2nd mortgage payment
Greater flexibility and more control over monthly cash flow
Added rate security with a closed end second