A Purchase Money Second (PM2) Home Loan* is a second mortgage that closes with a corresponding first mortgage from the same lender. The first mortgage covers 80% of the home value and the second mortgage (a fixed-rate home equity loan) covers 10% – meaning you have a down payment of only 10%. A PM2 has advantages for a buyer that doesn’t have or doesn’t want to put 20% down. This type of loan allows you to avoid paying for monthly private mortgage insurance (PMI). Plus, the home equity loan does not have a pre-payment penalty so you can pay it off at an accelerated pace if desired.
Lenders may restrict PM2 loans to owner-occupied properties and there are minimum credit score requirements.
Contact me and we can do a comparative analysis to see if the PM2 is the right loan for you.
*Loans are subject to credit approval and other underwriting criteria and not everybody will qualify. Certain restrictions apply. Home Loan programs, terms and conditions subject to change without notice. Boeing Employees’ Credit Union NMLS ID 490518.
Terri Marks, BECU, Mortgage Advisor, 425-609-5489, MLO#517752