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“80/10/10” Explained; Lower Payment; No PMI; Longer Close

We are getting many questions about “80/10/10” financing lately. “80/10/10” stands for an 80% loan-to-value (LTV) first mortgage, a 10% LTV 2nd mortgage, and a 10% down payment.

The purpose of getting two mortgages with 80/10/10 financing as opposed to one mortgage to 90% LTV is twofold: (1) borrowers avoid PMI by keeping their primary mortgage under 80% LTV; and (2) borrowers get a much lower payment overall.

Overall payments are lower b/c borrowers have no PMI, obviously, and b/c the 2nd mortgages are Home Equity Lines of Credit (HELOCs) with “Interest Only” payment options.

Almost all major banks offer HELOCs, but only a select few offer HELOCs that fund “concurrently” with a first mortgage. JVM’s HELOC Lender is TCF bank. They perform extremely well, and always accept our first mortgage appraisals without question.

80/10/10 financing takes longer to close – we need 21 days, as opposed to 14 days for most single-loan conventional and FHA transactions.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646