Chesterfield County Real Estate: Piggyback Loans
Have you heard of the financing option called the “piggyback loan”? This is where the property is actually purchased using more than one mortgage lender for one mortgage. While there are many variations, the piggyback loan which is also known as the 80-10-10 loan, can be typically defined as a 10 percent second mortgage coupled with a traditional 80 percent first lien and a 10 percent down payment. This loan can be mixed in a variety of different ways to make up the difference between a conventional loan and almost any amount of down payment.
A piggyback loan is basically a second mortgage that they give you at the time of a home purchase or refinance. These types of loans allow you, the home buyer, acquire or refinance a home with less than a 20 percent down payment or equity. One advantage to this style of loan is that the homebuyer isn’t required to carry private mortgage insurance.
Homebuyers can also use this piggyback loan as a source of funding for making a bigger downpayment on their new Chesterfield county real estate. This can be to their advantage because private mortgage insurance can be quite expensive and it is not tax deductible.
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