Conventional Mortgage Loan: Money and Loan Information

These days many home buyers do not have the 20% down payment necessary to qualify for a conventional mortgage loan. This means that they would be subject to PMI (private mortgage insurance). PMI is mortgage insurance for the bank, that YOU have to pay for. If you default on your loan, the insurance company will pay the bank their due. Obviously, this insurance tends to be very expensive. In order to avoid PMI, over half of current home buyers take out a second loan to pay for the 20% down payment. Usually these home equity loans have a higher, adjustable interest rate however, the combination of the low interest 80% loan, and the high interest home equity line of credit, is still less than the cost of PMI. Moreover, this type of financing is so commonplace that you do not have to fill out any extra forms. Many banks assume you do not have $60,000 dollars cash lying around for your home purchase and have made it standard practice to offer these "piggyback" types of loans. Moreover, the interest on the small loan is also tax deductible. This is something you do not get while paying PMI. With competition these days, banks are ever more creative in their loan practices.

Is refinancing a loan right for you? Run the numbers and find out for sure. Talk to a financial advisor or visit one of the thousands of resources available on the internet today.

Broad Street Mortgage Fixed or Adjustable Rate Conventional, FHA - Broad Street Mortgage Fixed or Adjustable Rate Conventional, FHA Fixed or adjustable rate conventional, FHA or VA Loans.
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