Cost Benefits of a Second Mortgage
PMI Savings: For a down payment of less than 20%, Private Mortgage Insurance (PMI) is required and PMI charges apply. PMI costs vary depending on the LTV, required coverage level and payment method (i.e. monthly or annual). With a second mortgage, PMI is not required and this can mean a significant savings.

Tax Benefits: Calculated annual savings on the worksheet excludes any tax benefits your customer may receive. Generally, interest on home equity products is tax deductible for aggregate loan and line amounts up to $100,000 regardless of the use of the proceeds. Product amounts over $100,000 may not be tax deductible unless the proceeds are used to buy, build or substantially improve the home. Consult a tax advisor regarding a specific situation.

Comparing Mortgage Options for Savings
This worksheet compares a single mortgage option with the combined first and second mortgage to show the savings with a second mortgage. To begin, place the cursor in the first box and click the mouse.