Quick Facts About 80-10-10 Loans
- Consumers carry more debt with an 80-10-10 due to a higher interest rate on the second lien
- Consumers build equity slower with an 80-10-10 since less principal is being paid
- 80-10-10s are not cancelable
- A single loan with cancelable and deductible PrivateMI is usually going to cost less than an 80-10-10 over the life of the loan
- Refinancing the second lien is not free – there is a cost involved in refinancing to eliminate the second loan
- Consumers generally pay more in closing costs with an 80-10-10
- 80-10-10s make it harder for consumers to tap their equity for home improvements due to the higher debt load they are carrying
- Any way you slice it, a second mortgage is still a second mortgage