any advise you financial wiz kids can give me??
I own 3 houses here in Little Rock. Your goals will depend upon what you should buy. I always suggest if it is an investment to buy the smaller house on a bigger street. They are much easier to sell when it's time to upgrade. Also, if you don't have much to put down I would get an 80-20 loan. I did that on my last one and I am pleased.
an 80-20 loan is actually 2 loans.
The 80% is a typical loan that you would get about prime rate (dependant upon your FICO score)
The 20% is a second mortgage that is a generally higher ineterest rate. If you get the primary at about 7%, you could see your second mortgage at about 10%. There is more risk to the bank on the second loan because they are in second position. If something went really sideways on the loan, the second position loan could conceivably be wiped out.
The reason for this is to prevent PMI (primary mortgage insurance). PMI is an insurance for the lender for loans that exceed 80% loan to value. You can't write off PMI on your taxes but you can write off the interest on your second.
Get pre-approved first. Talk to a lender. It doesn't cost you any money and it will give you a pretty good idea of where you stand. If they want to charge you, find a different lender. Also, do it on the phone or in person. Ask what your FICO score is. 400 is the pathetic and sad, 620 or higher is satisfactory and 850 is the highest (which is like chasing a rainbow). The higher your score, the more loan programs you can be exposed to.
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