A few years ago before the real estate crash, the banks offered loans of all sorts. The last couple of years, most of the banks offered loans of no sorts. Most conventional loans went back to the standard 20% down rule and it seemed as it no one could get a loan.
Like a phoenix rising from the ashes, one Northern California bank (Western Bancorp) recently announced the revival of the “80—10—10” loan. For a brief refresher, this loan allows borrowers to make a 10% down payment and get a jumbo loan amount.
For an overview:
80% 1st Mortgage Loan
10% 2nd Mortgage Loan
+10% Down Payment .
100% of the Purchase Price
or Appraised Value
It only works for owner occupied homes on loan amounts up to $750,000 and purchase price up to $833,000.
For borrowers, this loan means that they do not have to pay additional PMI insurance which costs about .7%.
We know that when one bank offers a loan that other will likely follow so be sure and keep an eye of rates and conditions.