Quote from @Jay Voorhees:
Hi Jason - I'm very curious, what type of loan product are they offering you?
For combination financing in general, you'll want to pay attention as to whether or not the second loan is fixed or adjustable. Also, whether or not you are making an "interest only" payment for part of the term, or if it is fully amortizing. Combination financing is a common method for reaching above the county loan limit, but as this limit is $1,867,275 in Contra Costa, it seems this is truly only for the "down payment" itself. This must be a specialized product, because conventional lending law will still require your combined loan to value ratio to be under 80 for an agency loan on a 4-unit home.
This is what I got from my lender
We do not send out documents on the 2nd until you have a fully executed purchase contract. The current terms for the 15% 2nd has a 20 year fixed rate at 10.74% so if the 2nd was in the amount of $225,000 the payment would be $2,282.74. If you have direct deposit with the credit union and set up auto pay for the 2nd the rate is .50% less so the payment would be $2,207.20. There are no prepayment penalties on either loan. On the cost breakdown it showed the 2nd payment at $2,359.29 because the rate was 11.24% then. Hope this help.
