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Down Payments and Refinance Home Loans
September 3, 2009 by Mortgage Align · Leave a Comment
People who can’t scrape together money for down payment have to take Private Mortgage Insurance (PMI) until their home appreciates to an 80 percent loan-to-value ratio. They can refinance the PMI and so a piggyback loan, allows consumers to bypass PMI.
A short 2nd mortgage
Opting for a refinance home loan for a shorter term and can pay off second mortgage more quickly than the first, and this arrangement could be beneficial.
Check the closing costs
Main aspect is to keep costs low, as a key for a piggyback loan. Most second mortgages charge closing fees. People should take a loan that includes high closing costs.
Appreciate your home’s appreciation
Homes appreciate fast. If it shows that your home will appreciate to the 70 percent loan-to-value ratio mark faster than you can pay off the second, this planning might be a good choice.
You have to see your own financial planning as it will dictate the best choice for you.
