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My husband and I are purchasing a home very soon.  The sale price is $520,000, and we are prepared to put 10% down.  We are being offered various offers, including:

- 90% LTV at 4% with no points (30 years fixed),
- 80/10/10 with the 80 at 3.5% and the 10 at prime + 1.99% (HELOC)
- 7/1 ARM with 80 at 2.5% (0.75% discount points), and 10 at prime + 1.99% (HELOC)

I need some advice on what kind of product we should be taking.  We expect to be at this home no longer than 7 years.  With any of these options, we have some extra money to pay down the loans but not enough to cancel the HELOC within 2 years. 

What kind of product should we be considering and are there any better products out there for our situation?

We are located in the Northern Virginia area.
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March 31 2013 - Old Town
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Does the single loan have mortgage insurance.  You may want to look at a single loan with no MI option as well.   The split mortgage is not a bad option but you would need to worry about the prime rate raising and the fact your payments are interest only.
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March 31 2013
If the single loan is lender paid MI, I think that is your best option. Personally, I agree with Joe, the ARM options for both the first only or the 80/10
 interest only would scare me, where will rates go over the next 7 years?
You could also explore buying out the MI with a one time payment, as well.
Best wishes, Jim  Happy Easter!
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March 31 2013
Is 15% down appealing if you could waive M.I. and not pay a higher rate or fees than you would for 20% down? If so please contact me via my profile and we can discuss this potential exception product that I have helped others close with.
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April 04 2013
I would definitely go with one loan and Lender Paid MI.  Best Wishes!
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April 30 2013
 
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