Nashville Tennessee Mortgage Loans

Primary Mortgage Nashville versus First Mortgages

One of the first things you will learn when you research primary mortgage Nashville is this type of mortgage should not be mixed up with a first mortgage or even a second. This primary mortgage does not originate with a bank.

Those who are considered primary mortgage lenders work with the borrower one-on-one. They have their own resources that the money for the loan comes from and they lend the money. Their profit comes from the fee for processing the loan. It is not from the interest like a traditional loan.

When the primary mortgage Nashville loans the money to a consumer, they turn around and sell the loan to an investor. The mortgage notes are paid to him and the primary mortgage lender gets the cash for the loan. This allows them to do this again and again.

80-10-10

Another type of primary mortgage Nashville is the 80-10-10. This is a program often used to keep from paying private mortgage insurance (PMI). The loan is split up with 80% being the primary mortgage, a secondary mortgage for 10% and the remaining 10% is the down payment the borrower puts down.

The secondary mortgage for 10% will have a higher interest rate, but it is a small part of the loan. The cost for the 80-10-10 is lower than paying the full mortgage and the private mortgage insurance. This is often done to help people who could not afford the loan payments and the PMI.