If you’re thinking about purchasing a home or refinancing, think about breaking the total loan amount into two. If you do two loans, you’ll secure a lower interest rate on your first loan, and often avoid certain adjustments that would come with a single loan.
You can avoid paying mortgage insurance, and if doing a refinance, you can do a rate and term refinance on the first loan, and a cash-out refinance on the second loan.
If you do two loans, often times you can get a larger amount of total financing as well. Instead of being capped at 90% on one loan, you may be able to break up the loan into an 80/20 and get a full 100% from your bank or lender.
That’s just a taste of the many creative financing options available if you break your loan up into two. While you will pay slightly more upfront for fees on the 2nd loan, the flexibility and possible interest-rate savings may make it the right choice.
Learn more about mortgage combos and blended rate.
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