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A
piggyback mortgage is financing which consists of two loans,
piggyback loans are also called 80 10 10 mortgage or 80 20 or 80
15 5. For a residential property, the first mortgage would
cover 80% of the value of the property, plus a second mortgage
which covers 10%, 15% or 20% of the value of the home.
Essentially the loans are stacked and that is why the term
"piggyback" comes from. Piggyback mortgages are also the
way to go for many who don't have 20% to put down and want to
avoid PMI.
Because the piggyback mortgage stacks a high-rate small second
mortgage on top of
a
lower-rate first mortgage it also allows the home buyers to
afford more and the interest on the second loan is deductible.
Compare your loan options and see if a piggyback mortgage is
right for you.
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