The Purchase Money Second Home (PM2) Loan helps bridge the gap for homebuyers who can't or don't want to put 20% down. Part of the problem with not putting 20% down is that you may be required to pay for Private Mortgage Insurance until you've paid for 20% of the value of the house. Not into it? The PM2 loan is an alternative.
The idea is to simply combine a first and second mortgage. The first mortgage covers 80% of the home value and the second loan (a fixed-rate home equity loan) covers 10% of the home value. The remaining 10% is the down payment.
The PM2 results in a 90% Combined Loan-to-Value (CLTV). Your final purchasing power is the result of an 80/10/10 combination.
Buying a one-unit, principal residence
Wants to avoid Private Mortgage Insurance (PMI)
Desires purchasing power in a pricey housing market
Would rather save on the down payment to help with new home expenses – improvement projects, furniture, appliances, etc.
First Mortgage: Conventional Fixed Rate or 5/5 ARM; maximum amount is $750,000.
Second Mortgage: Fixed Rate
BECU is waiving the origination fee on conventional fixed-rate or adjustable-rate home loans for purchase transactions* – and yes, that applies to PM2 loans.
BECU homebuyers already enjoy multiple benefits, including competitive rates, a personal mortgage advisor and local underwriters that live and work in the Puget Sound area. Adding yet one more benefit, no origination fee, significantly reduces closing costs. And reducing cost is just one more way BECU can help members combat the skyrocketing prices in today's real estate market.
To talk to a mortgage advisor about the PM2 and other homebuying options, call 800-233-2328 or make an appointment online.
*Offer effective with applications dated 4/15/2016 and expires 10/15/2016 and applies to purchase transactions only. The no-origination fee promotion does not currently apply to government (FHA/VA) loans. BECU reserves the right to continue this offer indefinitely.
Loans are subject to credit approval and other underwriting criteria and not everybody will qualify. Certain restrictions apply. Home loan programs, terms and conditions are subject to change without notification. The BECU PM2 loan must be closed concurrently with a BECU mortgage loan.