Countrywide Home Loans Get Financing |
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Countrywide home loans offer 100% financing. As home prices continue to climb, borrowers increasingly turn to 100% financing and home loans that side step the need for mortgage
insurance. One such loan offered by the Countrywide home loans division is an 80-20 mortgage. The buyer takes out two loans, the first for 80% of the purchase price and the second for 20% of the home's price. The borrower pays closing costs. The 80-20 mortgage allows people to buy without a down payment or without having to touch their savings to buy a house. There are many people who graduate from college and find good jobs. They have good credit, but they haven't had the opportunity to accumulate savings. Countrywide home loans are targeted at people who are stuck on the rent treadmill. They can afford a monthly rent that would cost roughly the same as a house payment, but after they pay their monthly bills, they can't save much money toward a down payment. Many of these people watch home prices rising faster than their incomes and feel like they're falling further behind with each month as a renter. Plenty of Countrywide home loans allow borrowers to buy houses with little or no money down, but they usually require private mortgage insurance, or PMI. Mortgage insurance protects the lender from the costs of foreclosing on a house when the borrower falls too far behind on the loan payments. The lender benefits, but the borrower pays. Generally, mortgage insurance is required when the loan amount is for more than 80% of the home's price. The way to avoid paying mortgage insurance is by getting a "piggyback loan" from Countrywide home loans, a second mortgage to back up the first mortgage. The first mortgage is for 80% of the home's price. The piggyback loan is for 20% of the home's price, less any down payment. An 80-15-5 loan would mean that the borrower got a main mortgage of 80% of the home's purchase price, a 15% piggyback loan, and made a 5% down payment. Myriad combinations, such as 80-10-10, are possible, but the 80-20 uses a piggyback loan without a down payment. Except in unusual cases, the interest rate on the piggyback loan is higher than the rate on the first mortgage. But the combined payment usually costs less than a loan from Countrywide that is greater than 80% of the home's value, plus mortgage insurance. This is especially true if the homeowner itemizes deductions on federal income tax, because mortgage interest is deductible but mortgage insurance is not. With Countrywide Home Loans, the 20% piggyback is always an equity line of credit pegged to the prime rate, and the 80% first mortgage can be a fixed-rate, adjustable-rate or interest-only loan. The 80-20 Countrywide home loans have their pros and cons. The pros are that you can buy a home with almost no money down. You just need closing costs and your payment can be as low as possible with the interest-only feature. The main con is a big drawback. If the house loses value, a possibility in overheated markets where Countrywide home loans might be especially tempting, the owner ends up owing more than the house is worth. That becomes a problem if the owner needs to sell the house or wants to refinance the loan. In such a case, the owner has to come up with cash to repay the Countrywide home loan in full. An 80-20 loan isn't just for cash-strapped borrowers. Some home buyers have ample down-payment money, but the money is invested and they don't want to liquidate it. So, if you want to get 100% financing against your home equity, Countrywide home loans division is the best option for you! |
