80-20 Mortgage

80/20 loans are also described as combination financing or piggyback loans that include 1st and 2nd mortgage loans that close concurrently. 80-20 home loans offer a convenient way to provide creative financing in a purchase, refinance, home improvement, or debt consolidation transaction. In a purchase transaction, a second trust is frequently used in combination with a first trust to avoid paying Private Mortgage Insurance or PMI. The first trust is always set at 80% of your purchase price which eliminates the need for PMI. We add a second trust of 20% of the purchase price or value. There are actually two versions of this program offered by several lenders. The first will require you to have 3% cash in the transaction (covering your closing costs) and the second requires no cash at all. I have had many clients close there transaction with no cash by having the seller pay all of their closing costs. Several programs will now allow combined loan amounts up to $500,000 and again, NO Mortgage Insurance!

Smart Home Mortgage Loans also offers several piggy-back loan alternatives, like the FHA home loan to 97% and the Freddie MAC 100% financing option as well.

100% Home Financing Appealing as Rental Unit Affordability Gets Worse Nationwide
According to the Dow Jones, the average hourly wage needed to pay for a two-bedroom apartment rose to $16.31 in 2006, up from $15.78 last year, according to the "Out of Reach" report published annually by the National Low Income Housing Coalition. 100% home financing is rising in loan application volumes as the cost of renting continues to rise. The most expensive home market in the country for renters is Stamford/Norwalk, Conn., where a worker must earn $30.62 per hour to be able to afford a two-bedroom apartment. The next three priciest markets are in California, with San Francisco costing $29.83, Orange County at $28.56, and Oxnard-Thousand Oaks-Ventura at $28.29.

The top five priciest states and territories are Washington, D.C., where a renter must earn $24.73, followed by $23.53 in Hawaii, $22.86 in California, $22.65 in Massachusetts, and $21.21 in New Jersey. Puerto Rico was the most affordable with an $8.83 hourly wage needed to afford a two-bedroom apartment. West Virginia was next at $10.10, followed by North Dakota at $10.33, Arkansas at $10.40, Alabama at $10.55, and Mississippi at $10.65. As a result, many mortgage lenders are offering 80-20 home purchase loans that are available for first time home buyers.