When a borrower applies for a mortgage loan, he is generally required to make a down payment as part of the mortgage terms and conditions. Traditional lending agencies like banks and credit unions finance only eighty percent of the price of the home. This makes it obligatory for the prospective mortgagee to provide the balance twenty percent. Even when this appears to be a fair condition, the fact is that not many people are in a position to provide the type of money required, covering the down payment. This has led to piggyback or 80/20 mortgage green trust cash direct private lenders for personal loans being offered by mortgage lenders.

The basic idea behind the 80/20 loans is quite simple. If the buyer does not have the required down payment of twenty percent, he would naturally look for a 100% finance, which would lead to his paying PMI or Private Mortgage Insurance without which the loan would not go through. PMI adds nearly $100 to each of the monthly mortgage payments.

On the other hand, financing the entire cost of the property to be purchased through an 80/20 loan would circumvent the payment of PMI, as there would be two loans. One covers eighty percent through the first mortgage and the other, the remaining twenty percent through the second mortgage, finances the total loan required.

The eighty twenty loans are especially beneficial to first time home purchasers. First home buyers are generally young people who have been unable to build cash reserves large enough to cover the down payment. However, they still want to go ahead with the purchase of a house. By opting for the 80/20 loans, they do not have to put off their plans for buying a home.

This green trust cash native american loans bad credit is also helpful to people who suffer poor credit ratings. They do not stand a chance with banks, mortgage companies or credit unions because these agencies prefer to deal with applicants who have a high credit rating. These green trust cash short term loans lenders provide assistance by way of low mortgage rates, closing costs and down payment among other facilities.

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