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Piggyback Mortgage — for borrowers putting less than 20% down who want to avoid Private Mortgage Insurance

When a borrower takes out more than one loan at the same time to purchase or refinance a property, the additional loans are known as Piggyback Mortgages.

Sometimes they’re also called 80-10-10 mortgages. The first mortgage represents 80% of the property’s value, the second mortgage represents 10% of the total value, and the other 10% is the cash investment (or equity) of the person who’s buying or refinancing it.

This structured transaction offers several benefits:

  • Lower interest rate on the first mortgage when total financing exceeds $417,000
  • The additional cost of Private Mortgage Insurance (PMI) is not required, even with a down payment of less than 20%
  • The ability to lower monthly payments by paying off one of the structured mortgages in advance of the other
  • Structured cash-out with better terms on the first mortgage

Contact a Reliant Mortgage Originator to see how structured financing can save you money!

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