Typically, the first mortgage is set at 80% of the home’s value and the second loan is for 10%. The remaining 10% comes out of your pocket as the down payment. This is also called an 80-10-10 loan, although it’s also possible for lenders to agree to an 80-5-15 loan or an 80-15-5 mortgage.
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It's usually less expensive than paying your 90%-10% loan w/PMI. 80% LTV without MI, just has the MI built into the rate one way or another.
80 10 10 Loans for Today’s Home Buyer. An 80 10 10 loan is a mortgage option in which a home buyer receives a first and second mortgage simultaneously, covering 90% of the home’s purchase price. The buyer puts just 10% down. This loan type is also known as a piggyback mortgage.
One method of avoiding PMI is a piggyback mortgage, or an "80-10-10" mortgage. The numbers reflect how the purchase price will be covered. Specifically, the homeowner will take out both a primary mortgage and a second mortgage or home equity line of credit equal to 80% and 10% of the home’s value, respectively.
The first component of an 80/10/10 is a conventional first mortgage that will cover. for this type loan, but it will carry a higher interest rate than the first mortgage.
The 80/10/10 mortgage is widely-available and buyers are using it to avoid PMI; and, to buy homes more cheaply. More on the program plus today’s live rates.
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Rates for piggyback loans are about 2 percent higher than on other loans, and the common payment period is around 15 years. Before you decide to apply for an 80-10-10 mortgage, make sure that the money you will save by avoiding PMI fees will be more than the additional costs incurred due to the higher interest rate of the piggyback loan.
80/10/10 Loans. A piggyback loan, or an 80/10/10 loan, is a mortgage that is taken out on top of another mortgage. Although it isn’t quite as popular today as it was before the recession in 2008, when it was used to get around paying for private mortgage insurance, some people still use the 80/10/10 loan for the same purpose.