Piggyback mortgage

Piggyback mortgage

A mortgaging technique used by homeowners to reduce their loan-to-value ratio and avoid the need for private mortgage insurance (PMI). Piggybacking consists of a homeowner either taking on a second mortgage as the original one is refinanced, or taking out two mortgages together. By splitting the total mortgage amount into two loans, the borrower can decrease the ratio of the amount of the mortgage to the value of the home to under 80%, the ratio floor that necessitates PMI. The downside of this method is that the second mortgage typically comes with a higher interest rate than the first mortgage. Piggybacking can also be used on certain types of loans.
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It declared that a piggyback mortgage was "no more likely to default" than a standard mortgage.
The following are some basic tips for consumers with limited savings as they consider whether to choose a loan with mortgage insurance or a piggyback mortgage to purchase a home:
The section features a calculator that helps loan shoppers figure out whether an insured loan or a piggyback mortgage is best for them.
He asked them to assist in disseminating his Critical Report and Financial Software Program to help every borrower with a Piggyback Mortgage from losing their homes.
a young couple with a piggyback mortgage from Bellevue, Washington, which has one of the highest concentrations of these loans in the country (51%).
I expect every mortgage broker, loan officer, lender and real estate agent that knowingly put a client into a piggyback mortgage to contact them and tell them to read this Critical Report," said Gill.
In Casale's commentary on KYW, he explains that a piggyback mortgage is when a homeowner combines a first and second mortgage, and makes a down payment of less than 10 percent.
A piggyback mortgage -- where the loan combines a standard first mortgage with a home-equity loan or line of credit to avoid private mortgage insurance or the higher interest rates on jumbo loans (10%).
A piggyback mortgage structure is one in which the borrower obtains a second mortgage at purchase, thus reducing the first mortgage loan-to-value ratio to 80 percent, eliminating the need for MI.
And CitiMortgage will continue to offer piggyback mortgages.
Brokers reported that the two prime loan products where supply has dried up the most are 80/20 combo or piggyback mortgages and high LTV loans with private mortgage insurance.
While it's not all doom and gloom, there are still a number of people with bad credit stuck in expensive subprime or risky exotic and piggyback mortgages, which could result in dramatically rising payments at best and foreclosure at worst," Wachter said.