Expert Advice

What Do 80/15/5 and 80/10/10 and All Those Other Numbers Mean?

These numbers are referring to the way loans are structured in a purchase.For example, imagine a $100,000 purchase price for ease of numbers.With an 80/15/5, the buyer would be:
  1. Getting an 80% first trust loan (this is his primary loan), or $80,000.
  2. Getting a 15% second trust loan (this loan is at a higher rate), or $15,000.
  3. Putting 5% of his own money into the deal, or $5,000. (That would be the "5" in the 80/15/5).
An 80/10/10 is similar, but in that case he's putting 10% of his own money into the transaction, etc.


This entry was posted on Monday, May 24th, 2010 .



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