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Matthew Titel

NMLS ID 254914

262-691-6100 info@commonwealthmg.com

Combination Loans

A combination mortgage loan is a good option for a borrower who is looking for a conventional loan but does not have a down payment or equity of at least 20%, and does not wish to pay Private Mortgage Insurance (also known as PMI).

Combo loans are available in various increments: 80/20, 75/25, 80/15/5 and 80/10/10. These loans split the financed amount into two individual loans. The first loan is either 75% or 80% of the purchase price while the second loan is the remaining amount of the purchase price with an option to have a down payment of either 5% or 10%.

Down payments decrease the risk for the lender which can lead to better rates for the consumer. This loan is one way to avoid PMI, and still finance over 80% of your home's value. Downsides to this type of loan are the additional closing costs and higher interest rates associated with the second mortgage. Because of ever changing guidelines of this program please contact one of our mortgage professionals for more details.

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