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Old 09-10-2007, 01:35 PM
 
49 posts, read 249,529 times
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A patient of mine told me that 80/20 mortgages aren't available anymore, but I find that hard to believe? He said that lenders are "cracking down" and eliminating this as an option for buyers without downpayments. That scares me because my fiance and I planned on applying for this type of mortgage. Is it true?
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Old 09-10-2007, 02:27 PM
 
Location: Lehigh Valley
1,030 posts, read 3,801,093 times
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It's true that things have changed drastically in the lending arena over the past few months, but I don't honestly know if the 80/20 option is gone all together. I suspect there may still be lenders out there who are writing such loans - I would think your credit would have to be steller and your debt to income ratio excellent too.

Good luck!
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Old 09-10-2007, 03:03 PM
 
Location: California
510 posts, read 2,970,102 times
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There's still plenty of lenders who do 100% financing. One way to do this is with an 80/20 first and second combo. Honestly though, the FHA 97% or the MyCommunity100 (one loan to 100%) are better loans overall in this current market.

The loans that are much harder to get are the ones where you can't prove your income, and you have to state your income... what people call "liars loans". These loans were designed with the self employed individual in mind, and really are needed for them. Most self employed people have so many write offs that their adjusted gross income is too low to qualify. The problem started when they offered these stated income loans to people who were just W2'd, or retired and on a fixed income. Those truly were liars loans, and allowed people to overstate their income and get into loans they could barely afford. Once rates went up, and their loan adjusts, they no longer can afford their loan...hence all the foreclosures.

So, to answer your question, there are still plenty of lenders who do 80/20 loans as long as you can prove your income. You really want to be sure you get in touch with an experienced loan officer to discuss options. Don't listen to your patients about mortgages unless they are in the business... even though we don't have near the education of a doctor, it's a similar thought process...how many of your patients would be in a better place if they took medical advice from me

If you're getting close to buying, hunt down some of my previous posts in other threads. There's lots of info I've provided, as well as many of the other members to this forum. Stuff ranging from what programs are best, who to go to, general stuff first time home buyers should know...etc... once you've read some of that, feel free to post a more detailed scenario of what you are trying to accomplish and we can offer some more advice.

The best advice though is to call a bank and a broker... interview loan officers and see who knows their stuff. From there you can get pre-approved through both, and see who can give you the best deal. Credit inquiries for a mortgage within a 30 day period are treated as one inquiry, but I wouldn't go too crazy shopping around. Don't give up the social until you believe they know their stuff.
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Old 09-10-2007, 04:43 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,103,707 times
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yep MyCommunity with 0 down...620+ credit scores will get you a LOW PMI PAYMENT!

HomePossible is the same thing but through freddie mac.

FHA with 2.25% down payment...and also low PMI payments.

also, everything depends on the loan amount of the home.
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Old 09-27-2007, 01:56 PM
 
4,546 posts, read 11,559,286 times
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Quote:
Originally Posted by KristyLiz View Post
It's true that things have changed drastically in the lending arena over the past few months, but I don't honestly know if the 80/20 option is gone all together. I suspect there may still be lenders out there who are writing such loans - I would think your credit would have to be steller and your debt to income ratio excellent too.

Good luck!
$0 down loans (including 80/20s) are still readily available for loan amounts up to $417k. They require decent to good credit (not steller) and the max. DTI can still be higher than most should be borrowering.
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Old 09-30-2007, 07:18 PM
 
69,372 posts, read 53,646,153 times
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Quote:
Originally Posted by DGDurmie View Post
A patient of mine told me that 80/20 mortgages aren't available anymore, but I find that hard to believe? He said that lenders are "cracking down" and eliminating this as an option for buyers without downpayments. That scares me because my fiance and I planned on applying for this type of mortgage. Is it true?
80/20 mortgages were never good to take out anyways.. They were pushed by mortgage brokers because brokers then received two brokers fees for every loan vs one, selling them to buyers to avoid the Federal Insurance fee..
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Old 09-30-2007, 08:08 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,103,707 times
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that would be great if brokers were HIGHLY compensated for 2nd mortgages.

why dont you try to get a 2nd mortgage or heloc with a broker and see what most of them will say? They will send you to the bank....the pay on a 2nd mortgage cuts into their pay in a huge manner.

80/20's were invented by banks who wanted to sell more loans.

Quote:
Originally Posted by pghquest View Post
80/20 mortgages were never good to take out anyways.. They were pushed by mortgage brokers because brokers then received two brokers fees for every loan vs one, selling them to buyers to avoid the Federal Insurance fee..
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Old 10-01-2007, 12:22 AM
 
Location: Cary, NC
2,408 posts, read 9,671,078 times
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Quote:
Originally Posted by banker0679 View Post
that would be great if brokers were HIGHLY compensated for 2nd mortgages.

why dont you try to get a 2nd mortgage or heloc with a broker and see what most of them will say? They will send you to the bank....the pay on a 2nd mortgage cuts into their pay in a huge manner.

80/20's were invented by banks who wanted to sell more loans.
A relative is a loan broker and she said she made quite a bit of money setting up HELOC a few years ago when rates were so good and some banks were offering huge incentives to brokers.
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Old 10-01-2007, 09:19 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,103,707 times
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i doubt it......'quite a bit' isnt worth the hours required....just for a couple hundreds of dollars.
Especially when the banks were willing to offer it with no cost...and low rates.

Quote:
Originally Posted by jinxor View Post
A relative is a loan broker and she said she made quite a bit of money setting up HELOC a few years ago when rates were so good and some banks were offering huge incentives to brokers.
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Old 10-01-2007, 12:49 PM
 
4,546 posts, read 11,559,286 times
Reputation: 3069
Quote:
Originally Posted by pghquest View Post
80/20 mortgages were never good to take out anyways.. They were pushed by mortgage brokers because brokers then received two brokers fees for every loan vs one, selling them to buyers to avoid the Federal Insurance fee..
Another big MIS-CONCEPTION. Mortgage lenders almost always make less when the loan is broken up into a 1st and a 2nd. As a matter of fact the 2nd is often done for free or a very small amount of income.

How do you know the
Quote:
80/20 mortgages were never good to take out anyways..
? Did you ever analyze the numbers? Before PMI was tax deductible and the when the rates on 2nds were attractive like 2003 & 2004 the 80/20 was an excellent way to go $0 down.

PS. the mortgage insurance on conventional loans is written by private insurance companies (not the Federal gov't).
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