

The Mortgage Insurance Killer
Remember the good-old-days of using a second loan to eliminate mortgage insurance? If you have sought out home financing for a purchase or refinance within the last seven years you may not. That’s
As the market shifted in the middle of 2007 and lenders tightened guidelines mortgage insurance became the norm. Until now. Second loans are making a come back and we now have the ability to finance a purchase up to 90% financing and a refinance up to 85%. See the table below for an example of what a purchase with one loan with mortgage insurance looks like compared to a purchase with two loans.
One loan w/ Mortgage Insurance | Two Loans | |
Purchase price | $500,000.00 | $500,000.00 |
1st loan amount | $450,000.00 | $400,000.00 |
2nd loan amount | n/a | $50,000.00 |
1st loan payment | $2,149.00 | $2,149.00 |
2nd loan payment | n/a | *$167 |
MI payment | $259.00 | n/a |
Total monthly payment | $2,408.00 | $2,316.00 |
*fully tax deductible |
The two-loan option not only gives you increased purchase power and/or lower monthly payment but it also maximizes your mortgage-interest tax deduction. Mortgage insurance is not currently tax deductible.
Mortgage Therapist
858-863-0264