In today's world of high-priced homes the cost of living is always on the rise. Conversely it would seem that wages are not pacing this cost. Buying a home has become more and more difficult as time goes on and to some it may seem that buying a home will never be a viable option. Well, perhaps it is time that these people looked into the possibility of a 100% financing option. These loans are tailor made to help people with good credit but little liquid cash to make a down payment, afford the home that they have always wanted. This kind of loan eliminates the need for a cash down payment by splitting the total loan into 2 different smaller loans. An 80/20 program is one of the most favored of these programs. It gives an 80% mortgage loan and a 20% home equity loan that covers all of the down payment and loan amount.
This kind of loan program is nice as it allows the borrower to avoid not only the down payment but the necessity of applying for a higher-rate jumbo loan. Typically with an 80/20 loan there are two monthly payments to be made. The primary loan payment is due at the beginning of the month while the home equity loan payment is due mid-month. There are also some pretty nice benefits to this kind of loan. One of these is tax savings. This occurs as payments had against the home equity loan may be tax deductible. So if you are involved in this kind of loan make sure you speak to your accountant to find out if you can claim these payments. This type of financing also has numerous choices that one can utilize to customize their loan with either FRM's or ARM's. Most financing options will have the choice of using a 15 or 30 year fixed rate mortgage or 5/1, 7/1 and 10/1 fixed period adjustable rate mortgages.
Whichever type of loan you are seeking, make sure that you explore all your options before you sign anything. Financing a home is something that will have a huge part in determining your financial future. Much of your wealth will be built up in the home and it's equity so it is well worth the time and effort involved in educating yourself on the loan process and on the options that you have at your disposal. Jumping into financing of any kind without studying what you are getting into is never a good idea. Know your options and shop around until you find the loan program that is ideal for you and your needs.
