The 80/20 Mortgage...


ALG Mortgage Offers Them - But What Are They?
People hear a lot of about different types of mortgages, but many don't really understand what the differences are. The "80/20" mortgage is in fact two separate mortgages.

The first mortgage is mostly meant to pay for only 80% of the whole purchase price. The remaining 20% that you need to buy the home is put into a second mortgage". This second loan is often carried by a different lender, so you will make two separate payments each month to two different lenders. Since the second mortgage is for a much smaller amount, the banks' interest rates are higher, as they don't want to tie up their lending money for little return to them.

Even when the two separate interest rates are averaged, or "blended," the monthly mortgage payment tends to be less expensive each month than having the lender carry a single loan for 100%!

The 80/20 loan isn't the only type out there in regards to having more than one mortgage on the home. Give us a call and find out what types of mortgages you may qualify for! 888-755-2005