loan insurance

LOAN INSURANCE

These types of loans are often referred to as 80-10-10 loans or 80-15 loans. An 80-10-10 loan is a mortgage at 80% of the amount to be financed and than two home equity loans at 10% each. You will likely find that all three loans will have a different interest rate with this type of package. 80-15 loans are similar but would be the main loan at 80% and a secondary loan at 15% with the buyer putting down the additional 5%.

It is important to note that when financing 90% - 100% of a home, the appraisal will play a key role in the loan approval process. If the appraisal does not come out at a pre-determined amount.

You may need to go back and renegotiate the purchase price of the home or run the risk of being denied the mortgage. Most real estate contracts, do have a clause in them that allows the buyer out of the contract if they are denied a mortgage.You will want to speak to the lawyers and real estate agent in advance if you are planning for applying for this type of loan.