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Old 02-12-2011, 05:55 AM
 
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I saw a flyer that says instead of dealing with a jumbo loan, they can split it into 2 conventionals.

How does this loan work? What are the usual stipulations, fees, hoops to jump through?
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Old 02-12-2011, 06:13 AM
 
Location: Cary, NC
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One solution is called an "80/10/10."
You put down 10% and have an 80% first mortgage and a 10% second mortgage.
You can expect a significantly higher rate on the second, and/or that the second will have an adjustable rate. The second mortgage may need to be brokered out to another lender.

Assume your purchase price is $510,000...
You put down $51,000 and get a $408,000 first and a $51,000 second.
Since $417,000 is the threshold for a JUMBO loan in most areas, your first is below JUMBO.

5% down, "80/15/5" loans, used to be common, but are much harder to find.

I am not a loan officer. If you posed the question in the Mortgage forum, you would probably get more qualified and detailed responses.
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Old 02-12-2011, 06:17 AM
 
Location: Texas
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Exactly ^^^

If you don't have the down payment, then they can split the loan for you.
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Old 02-12-2011, 09:07 AM
 
Location: Plano, Texas
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Quote:
Originally Posted by stan4 View Post
Exactly ^^^

If you don't have the down payment, then they can split the loan for you.

In today's market, they would have to put down at least 5%. The only way to get 100% financing is on VA loans for veterans and through USDA which is designed to encourage home ownership in rural areas. It also has income limits as the program is for middle to lower class Americans and not the wealthy looking to build a big house in the country.
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