All About Loan Structure

November 06, 2020 by Dan Green

How your loan scenario is handled is going to affect your interest rate, your monthly payment, and how much house you can afford.

Loan scenarios are serious business and your mortgage lender is there to help you navigate.

We even have a word for this in the mortgage space.

It’s called “Structure”.

The structure of a loan is how it’s put together and a good loan structure will get you the best loan at the best price for what you’re trying to accomplish with the lowest risk to you and your home.

But, here’s the thing: there are dozens of ways to structure a loan.

  • There’s 20% down
  • The 80/10/10
  • The 75/25 for condos
  • The Conventional 97
  • The Community Second
  • The 65/15 in rare cases

There’s also Lender-Paid MI (LPMI), Borrower-Paid MI (BPMI), Single Premium, Split Premium, and these are just conforming loan options.

There are as many ways to put together FHA, VA and USDA loans, too.

And, nevermind if you want to use a down payment assistance program to help you buy that house.

As a home buyer, you can’t be expected to know your optimal loan structure. You only do this a few times in your life and trying to structure yourself is like going to WebMD.

Best to leave it to a professional.

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