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Combination Online cash advances
An increasingly attractive mortgage option is what is referred to as the combination loan or combo loan. Combination loans have several key advantages over traditional 30-year online cash advances and there are a wide variety of combinations to suit most financial situations.
By far, the most popular combination online cash advance is the 80/20 loan. This loan is actually two loans; the first loan is for 80% of the homes value, and the second loan is for the remaining 20%. With the 80/20 online cash advance, the buyer pays no down payment and is ideal for those without a significant amount of savings. Another key advantage of the 80/20 online cash advance is that the buyer avoids PMI or private mortgage insurance. PMI is required on all online cash advances that are greater than 80% of the homes value. A third advantage of the combination online cash advances is that both loans are tax deductible. By avoiding PMI and increasing their tax deduction, a buyer gains a significant cost savings advantage over traditional online cash advances.
Combination loans are available in many other ratios as well. The 70/30 online cash advance is usually preferred to the 80/20 loan for more expensive homes, when 80% of the homes value would be classified as a jumbo loan (above the FNMA/FHLMC limit) and subject to higher interest rates.
Another option is the 80/15/5 online cash advance, where the buyers makes a down payment of 5%. Other options include the 80/10/10, 75/15/10, etc which are all variants of the same.
In combinations online cash advances, the primary loan usually has a 30-year amortization term, while the second loan can have 30 or 15 year term. Expect the interest rate to be about 2% higher for the second loan. The buyer can opt for a fixed rate mortgage or an ARM (adjustable rate mortgage) on either or both loans. The ARM will have a lower monthly premium and allow for additional cost savings, but be sure to refinance the ARM loans if interest rates start to rise.
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