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80 / 20 PROGRAM (KS & MO)
PROGRAM HIGHLIGHTS: This program allows for an 80% first mortgage and a 20% second mortgage, which serves as the down payment. The interest rate on the first mortgage is typically 1/4 to 1% higher than other conventional rates, but it does NOT require any mortgage insurance. The interest rate on the second mortgage is prime + 1% for the first six months and prime plus 2.5% or prime plus 3.5% depending on the borrower’s FICO score. (A FICO score of 700 or higher qualifies for the lower interest rate.) The interest rate on the second mortgage fluctuates monthly based on the prime interest rate from the federal government. The interest on both mortgages is deductible and the combined mortgage payments usually compare favorably with other 100% loan products that carry mortgage insurance, which is not tax deductible. Seller is allowed to pay all of the buyer’s closing costs and prepaids on this product, so they can literally buy a home for nothing down. CASH ASSIST: With the combined 80% first mortgage and the 20% second mortgage the buyer gets into a home with NO down payment. ELIGIBLE PROPERTY: PREVIOUS OWNERSHIP REQUIREMENTS: Buyer does NOT have to be a first time buyer to qualify for this program. MAXIMUM SALES PRICE OR LOAN AMOUNT: $300,700 (the maximum conforming loan amount). MAXIMUM INCOME LIMITS: None. MINIMUM BORROWER CONTRIBUTION: CREDIT GUIDELINES: Borrower must have a FICO Score of 660 or higher. QUALIFYING RATIOS (Housing Expense / Total Debt Obligations): The total debt to income ratio on this loan cannot exceed 45% of the borrower’s gross monthly income. CASH RESERVE REQUIREMENTS: 2 months worth of the house payment in reserves. MORTGAGE INSURANCE: None. EDUCATION / COUNSELING: None. RECAPTURE TAX: Not applicable. PARTICIPATING LENDERS: Countrywide Mortgage LENDERS WITH SIMILAR PROGRAMS: CTX Mortgage (David Curry), Ameri-National Mortgage (Ed Casey), Columbian Bank & Trust (Ryan Renz), Commerce Mortgage (Bill Smith), First Federal Bank (Ken Harrison), First National Bank (Greg Redmond), Metcalf Bank (Linda Qureshi), Realty Home Mortgage, Wells Fargo Home Loans Affiliate (Diana Maloney), WEB LINK: www.countrywide.com QUESTIONS: jon_platz@countrywide.com, 913.438.8020, ext. 224, ecasey@anmco.com, 913.253.0130, bill.smith@commercebank.com, 816.234.7309, david_curry@ctxmort.com, 913.327.7550, ext. 103, rrenz@columbianbank.com, 913.491.1061, harrisonk@firstfedbankkc.com, 816.245.4173, gredmond@fnbk.com, 913.963.4883, diana.maloney@wellsfargo.com, 913.529.7405. CONNIE’S COMMENTS: This loan product has several appealing features… 100% financing, no mortgage insurance, interest-only payments on the second mortgage and more deductible interest. (Interest is tax deductible on your primary residence, while mortgage insurance is not.) The borrower can pay off the second mortgage at any time (or any portion thereof) and instantly reduce his/her mortgage payment or pull funds back out if a cash need arises. This option gives borrowers maximum flexibility with the use of their money—for investment, to pay off higher, non-deductible interest debt, etc. The interest on the second mortgage is tax deductible.
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