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20% Down Mortgage is Better?

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1 comment to 20% Down Mortgage is Better?

  • Jessica

    The 20% rule means if you do not have 20% equity in the property you have to pay mortgage insurance. The lender charges this because the loan to value is so high that there might be a chance of defult on the loan.The lower the loan to value they think somebody who has that much money into a property would not be likely to defult on there loan. So they want insurance to cover incase that would happen. You can get what is called a 80/20 loan or a piggy back loan. What that is a 80% loan with reg. rate and than a 20% loan with a higher rate. Interest you can wright off on taxes Mortgage insurance you can’t. So you have to figure out which one will save the most money. Also once your house value goes up to where you have 20% equity you can contact your lender and have the mortgage insurance removed.Hope this helped some what. As for the new home vs. the old from my own personal experience newer isn’t always better. Always check out the builder you use very, very well. If you have any other question in regards to mortgages please feel free to call me. Thanks and take care.
    1st Metropolitan Mortgage
    410.414.9411 ext.1030

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