Financial Education

Most 30-year mortgages require 20% down payment to qualify. That is a tall order for many first-time homebuyers, so Winnebago Community offers an alternative. We call it the 80-10-10 and this mortgage is structured so homebuyers save money while making a lower down payment.

The traditional mortgage is to make a 20% down payment, which allows you to borrow 80% of the home’s value without having to take out private mortgage insurance (PMI). PMI protects the lender from loss if the borrower defaults on the loan, but it’s a cost the homeowner never recoups. It also drives up the cost of mortgage payments, which is why many members prefer to avoid it.

That’s where the 80/10/10 mortgage comes in. The 80 is for the 80% of the home’s value covered by the first mortgage, the 10 represents a 10% down payment from the buyer and the other 10 is a second loan Winnebago Community provides to cover the additional 10% the buyer doesn’t have to put down. Not only will an 80-10-10 require a smaller down payment, but it will also save you money from having to pay for private mortgage insurance.

If you have 10% of your perspective home purchase saved, talk to one of our knowledgeable mortgage lenders to see if a 80-10-10 loan is right for you.