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Piggyback Loan
A Piggyback Loan is a home financing strategy where buyers take out two mortgages simultaneously—a primary mortgage and a second loan, often a home equity line of credit (HELOC). This loan structure helps borrowers avoid private mortgage insurance (PMI) when they can’t put down 20%. A common setup is the 80/10/10 loan, where 80% is covered by the first mortgage, 10% by the second loan, and the remaining 10% is the down payment. This option is ideal for homebuyers looking to reduce upfront costs while keeping monthly payments manageable. If you’re interested in avoiding PMI and maximizing home affordability, a piggyback loan could be the right choice.
A Reliable Home Loan You Can Trust.
Avoid Private Mortgage Insurance (PMI)
Save on monthly costs by eliminating PMI requirements.
Lower Primary Loan Balance
Reduce the size of your primary mortgage for easier management.
Smaller Down Payment Needed
Purchase a home with less upfront cash compared to traditional 20% down.
Flexibility in Loan Structure
Choose a second mortgage type (fixed or HELOC) that suits your needs.
Loan Guidelines
If your details are near these guidelines, we encourage you to apply or reach out. Even if you don’t qualify for a 30-year fixed-rate mortgage, we may have other options available.
The Home
Purchase a new home or refinance your current mortgage.
Credit Profile
A credit score above 620 is typically required.
Debt-to-Income
Your debt-to-income ratio (DTI) should be under 50%.
Closing Costs
Along with your down payment, you’ll need sufficient funds to cover closing costs.
Explore Your Potential
Our calculators help you understand and visualize your options
Mortgage Calculator
Planning to buy a home? Calculate your estimated monthly payments, including taxes and insurance.
Refinance Calculator
Considering refinancing your mortgage? Find out how much you could save.
Frequently Asked Questions
Have questions? We’ve got answers! Explore our FAQ section to find helpful information about loans, refinancing, and more. If you don’t see what you’re looking for, feel free to contact us—we’re here to help!
Who are Piggyback loan best for?
Piggyback loans are ideal for borrowers who want to avoid paying private mortgage insurance (PMI) and reduce their initial down payment on a home. They’re especially useful for those purchasing high-value properties or aiming to keep their primary mortgage balance below conforming loan limits.
How do Piggyback loan work?
A piggyback loan involves taking out a second mortgage alongside your primary loan. Commonly structured as an 80-10-10 loan, it includes an 80% first mortgage, a 10% second mortgage, and a 10% down payment. The second mortgage helps cover part of the purchase price, avoiding PMI and reducing the size of the primary loan.
What are pros and cons of a Piggyback loan?
Pros:
- Avoid paying private mortgage insurance (PMI).
- Reduce the size of your primary mortgage.
- Achieve homeownership with a smaller down payment.
Cons:
- Requires managing two loan payments.
- Higher interest rates on the second mortgage.
- Additional closing costs for the second loan.
Can I refinance a Piggyback loan?
Yes, you can refinance one or both loans, but the process may be more complex. It’s often beneficial to consolidate both loans into one if rates and terms are favorable.