U
SER’S GUIDE — 67
1ST AND 2ND TRUST DEEDS (COMBO LOANS)
Your calculator also figures Combo loans, or 1st and 2nd Trust
Deeds, which are common financing options for clients with smaller
down payments, who want to avoid mortgage insurance. The benefit
of Combo loans over single, fixed-rate loans with mortgage insur-
ance is that the buyer can actually save money obtaining two loans
vs. a single, larger loan requiring monthly mortgage insurance.
This calculator will find, after entry of appropriate loan variables
(including 1st and 2nd TD interest and term), the following loan val-
ues for 80:10:10 and 80:15:5 — or any LTV — loans:
• Blended interest rate for 1st and 2nd TD and equivalent
interest rate of fixed-rate loan w/mortgage insurance;
• Combined payment for 1st and 2nd TD and equivalent pay-
ment for fixed-rate loan w/mortgage insurance;
• Monthly savings of 1st and 2nd TD over fixed-rate loan
w/mortgage insurance;
• Adjusted term if savings applied to 2nd TD; and
• 1st and 2nd TD loan amounts and payments.
See the following examples. Note the first examples are for 80:10:10
and 80:15:5 loans, and the last example demonstrates how to enter
any LTV.
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