1+1=1 Loan
An interesting problem: not enough money for down payment, but only temporarily.
Several people have conveyed that they have budgeted themselves and have determined their total mortgage payment (PITI: principal, interest, tax, and insurance). To get to that payment, we discussed the down payment amount. In each case, none of the borrowers had the amount of down payment money. For closing.
They all will have money, from bonuses, within 60-90 days after closing. I have suggested structuring the loan by doing two loans. In all cases, they will have 20% equity after their bonus incomes have been available.
So I’ve described how we can do one loan at 80% loan-to-value, and then do a second mortgage for 20% of the purchase price. So they all are putting down 0% for the purchase, and when they receive their bonus, they can pay off the second mortgage (which is going to carry a higher interest rate) and lower their total payment. If we do the purchase with just one loan, the borrowers can pay down the principal, but the payment doesn’t necessarily recast (change based on the new loan amount), and the mortgage insurance (payment) would not change.
So here 1 loan plus 1 loan equals 1 loan.
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