If you're a renter or someone that's looking for a new home, you want to make sure that you are getting what you want without paying a lot of money in the process. However, with today's skyrocketing housing market, it's becoming clear that housing prices aren't going down anytime soon. But when you want to get out of your renting situation and start building some equity, buying a home is the only option in this situation. That's where the 80-20 mortgage comes in to help you. By offering newer homeowners a chance to take out two loans to help with housing costs, you are getting a more convenient way of buying a home and paying it off. What is an 80-20 Mortgage Anyway? When you're just starting to look at housing options, you will find that there is a mortgage for everyone. Whether you have good credit or bad credit, no money for the down payment or some money, there is some sort of payment plan that will work for you. With the 80-20 mortgage, you will be taking out two separate loans. One is for the actual home itself (the 80 part) and the other part is the 20% that is usually required at the closing for the down payment. This allows you to avoid down payments and PMI which is mortgage insurance that must be paid until you have paid down 20%. This is especially helpful when you are trying to buy an expensive home in which the down payment may be well beyond your means at the current time, though you would be able to pay it off eventually. Is it Worth the Cost? But the fact remains that this 80-20 mortgage almost sounds too good to be true. And when that happens, you should begin to question whether or not there is a 'catch' that you need to be aware of, especially when it comes to an investment that is as large as a home. Here are some things that you will want to keep in mind as you are deciding whether or not to choose the 80-20 mortgage.
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