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MTG Fight Night: 80-10-10 vs. REX
MTG Fight Night:  80-10-10 vs. REX
 
The tale of the tape:
 
                        80-10-10 Piggyback Loan            vs.                  REX Homebuyer
$1,100,000          Purchase Price          $1,100,000
$110,000          Down Payment          $110,000
$625,500            First Mortgage            $880,000  
$364,000            Second Mortgage            $N/A   
$905,634         Balance @ Month 84       $748,393
$1,263,554    Value of Home @ Month 84      $1,263,554
$404,984          Total P&I Payments          $331,934
$358,190       Net Equity @ Month 84       $339,739
 
In the blue corner, purchasing a home worth $1,100,000 and hailing from Los Angeles, "The Pig" has a 10% down payment and will finance his purchase with an 80-10-10 loan.  His first mortgage is a 30-year fixed rate loan of $625,500 at 4.250% (APR: 4.274%) and his second mortgage is a HELOC at Prime + 2.5% (fully-indexed at 5.750%) of $364,000.  His second mortgage has interest-only payments for the first 10 years. 
 
In the red corner, fighting out of the City by the Bay, "REX" will use the REX Homebuyer equity share program to match his $110,000 down payment.  He will take a fully-amortized 7/1 ARM at 3.500% (APR: 3.277%) for $880,000. 
 
Our assumptions include that the home will appreciate 2% per year, that Prime Rate will not change and that our comparison period is ... more

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