piggyback loan

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.

References in periodicals archive ?
In 2006, almost 30% of all New York City homebuyers taking out a first mortgage simultaneously took out a second lien, or piggyback loan.
Risky lending patterns threaten NYC neighborhoods
A piggyback loan is a combination of a first and second mortgage closed at the same time.
Specialized mortgage products: a game of chance? Those returning to the homebuying market after several years will be surprised by the baffling array of mortgage products. Choosing the right mortgage is no longer as simple as knowing the difference between a conventional and FHA loan or a fixed versus adjustable rate
In the case of younger boomers, a planner needs to help clients decide whether to take out a piggyback loan to avoid paying private mortgage insurance, according to Pearson.
With real estate red hot, planners offer cold logic: helping boomers keep real estate in perspective
If you have a piggyback loan, you are going to get hit, again, with a higher capital requirement at the bank and a higher interest rate.
Q&A with Dick Bove: this outspoken expert on the financial services industry shares his thoughts on current bank regulation and hot topics like Basel III
In the other alternative, the Piggyback loan, the SBA lender will make a second position loan and arrange for a non-SBA lender to make the remainder of the loan in a secured first position.
SBA loans have many advantages
Lenders were clearly aware of the piggyback loan problem by the third quarter, when origination volume for securitized closed-end seconds dropped like a rock to $1.
The big scramble
In the United States, if a borrower can't or doesn't want to make a 20 percent down payment, he or she generally has two choices: a piggyback loan (taking out a second mortgage to cover the difference between the 80 percent first mortgage and the down payment) or mortgage insurance.
Mortgage insurance 101: with rates rising and appreciation slowing, now might be a good time to give mortgage insurance another look. Add to that the tax deductibility of borrower-paid MI premiums for some borrowers this year, and it becomes even more appealing
Figure 3 compares a piggyback loan with an IO loan and a 30-year fixed-rate mortgage (FRM), both with mortgage insurance (MI), showing what would happen to each under a scenario of a two percentage point increase in the prime rate--not unlikely by any historical indicator.
Mortgage risk in today's market: while homeownership is at an all-time high, home equity is at an all-time low. That's just one element of the risks building in today's mortgage market, where borrowers are highly leveraged and the volume of loans facing rate resets in a rising-rate environment is sobering
Financial browser ?
Full browser ?