If you’ve made the decision to buy a new home, then odds are you’ve begun looking at your mortgage options. A mortgage can be quite expensive, however, there are ways that you can reduce the costs. The following are a few tips for getting some mortgage relief:
- Lender paid mortgage insurance – A lender paid mortgage insurance is different from a borrower paid mortgage insurance in that a lender paid mortgage insurance has a higher rate because the mortgage insurance is built into it. A lender paid loan will cost you less on a monthly cost basis even after homeowner tax deductions.
- 80-10-10 – Cap the first mortgage at 80 percent of your purchase price and add a piggy back mortgage, which is a second mortgage. This will allow you to avoid mortgage insurance altogether. Your first mortgage would be 80 percent, the second would be 10 percent and then you would put down 10 percent yourself.
- Jumbo loan – A jumbo loan is a loan bigger than $417,000 in which requires only a 10 percent down payment.