[jIM_Ohio]

I am one of those which "maxed out" loan to value on a mortgage in ohio. My wife and I are young, no kids, and we decided it was best to move into the school district of choice when we had the means.

We bought a house with an 80-15-5. 80% first, 15% second, 5% down. The 5% down was a 401k loan at that.

The important thing to us is the house established our budget before kids came. The 401k loan was paid off in 14 months ($1100/month payments). We then applied this $1100/month to the 2nd mortgage (15 yr ARM). We are now refinancing out of this and almost have 80% LTV on whole house.

When people go into this without knowing their terms, shame on them. The banks are out to make money. When people have 95% LTV, interest rates on first and second are higher (banks make more money), so it's to their benefit to make these loans.

Laws require loans like this to escrow taxes and insurance... paying more mortgage interest gets the larger year end tax deduction (we claimed 7 federal exemptions and still got north of 2k back).

To me it's about getting the house we want and eliminating the frequent costs associated with moving (closing costs+moving costs). It might not be the most fundamentally sound move, but other than not having the money for a down payment, the other numbers looked good to me.