What is a 75/25 mortgage and how does it work? Would I be making 2 mortgage payments a month?

My broker is suggesting a 75/25 mortgage which he says is good because you do not have to pay mortgage insurance, but does anyone know other details about it? Thanks!What is a 75/25 mortgage and how does it work? Would I be making 2 mortgage payments a month?
It's two loans. It's a first loan for 75% LTV, with a subordinate second of 25% LTV. In many cases, it's cheaper to do that than pay MI. But if LPMI is available, it's usually cheaper to do that. It usually depends on your Fannie findings, and really more things than I can go into and keep your interest. Anyway, if the same lender funds both loans, they'll probably only send you one bill, but a bill that is itemized to show that you're paying on two loans. The rate for the first one will be a conforming rate, but the second will be about 8-9%. If this is a purchase, watch your prepay penalties, especially if you go into the house with equity, because if you have sufficient equity going in, you can refinance after 6 months using the appraised value for LTV, not the purchase price, and then get one loan with no MI. You'd have to refi for 80% or less, though.What is a 75/25 mortgage and how does it work? Would I be making 2 mortgage payments a month?
Yes it is two mortgage payments, but normally is less than the original 100% with Mortgage Iinsurance.





It is a good loan but you do want to make sure you're getting the best deal on this loan! Might be time to double-check the rates.
2 payments; this is not a simple process though; you need a good loan officer to make this fly. I recommend First National Banc Corp. They do business in most states and are your best opportunity for someone to say yes. ADDITIONALLY, IF YOUR CREDIT IS SUSPECT, THEY SOMETIMES FRONT THE MONEY TO GET YOU INTO A CREDIT RESTORATION PROGRAM SO THAT YOU CAN QUALIFY FOR A LOAN. Check out the free evaluation form at the source website and a First National loan officer will contact you within 24 hours. Good luck.
75% first mortgage. 25% 2nd mortgage. 100% financing, without mortgage insurance.





A 75/25 is now generally going to save you .125-.25% in rate on your first mortgage compared to an 80/20. So your broker is on the right track.





Yes, you'll make 2 separate payments.





This is typical, and will almost always be cheaper than getting a mortgage that requires mortgage insurance.





And if you don't understand something, ask your lender. That's their job, to make sure you fully comprehend your financing.