piggyback loan

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Piggyback Loan

A loan for a portion of the value of a home over and above the traditional mortgage. In general, one must have a 20% down payment to purchase a home and one finances the remaining 80%. A piggyback loan allows one to borrow at least a portion of the remaining 20% (though at a higher interest rate than the remainder of the mortgage). A piggyback loan is an alternative to private mortgage insurance. It may allow more people to purchase their own homes.

piggyback loan

A combination of a construction loan and a permanent loan commitment.