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(1) an add-on fee for a CLTV greater than 90%, and (2) higher interest rates on the two loans because of the greater imputed risk deriving from no equity in the transaction. Even after your secondary financing has been paid off the higher reate on the underlying first will remain.

I'm no expert on underwriting guidelines, but I seem to recall reading over on the Buying a Home board that keeping the first mortgage under 80% is all that is needed. I'd suggest posing this question over on that board. There are a couple of mortgage pros that hang out over there who know what's going on in this area.

If you have 401k plans with loan provisions, and you have sufficient vested money in the plans, consider taking out loans

Of course, the interest on a 401k loan won't be deductible. That gets you to essentially the same place as taking equity out of the current residence.

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