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The Piggyback Loan

The Piggyback Loan offers an alternative to mortgage insurance. This loan can be used for a refinance or a purchase. Here's how it works:

Normally, if you were purchasing a home at $500,000 with a 10% down payment, your new 1st Trust Deed loan would be $450,000. This loan would require Private Mortgage Insurance and you would receive a Jumbo loan. (Jumbo loans are approximately .375% higher in the interest rate than conforming loans. Conforming loan limits are $417,000). With the new piggyback loan, you would receive an 80% 1st Trust Deed loan for $400,000.00 at a conforming interest rate, and a 2nd Trust Deed for $50,000.00. The 2nd Trust Deed can either be a fixed rate loan or an adjustable over the Prime Rate. The 2nd T.D. may also be a 30 due in 15 or a fully amortized 15 year loan. It can be an equity line rather than a straight 2nd. By taking a 15 year 2nd, you will also save a TREMENDOUS amount of interest. Please see below for more benefits:

Refinance Opportunities

1st and 2nd's combined to 90% loan to value refinances with no cashout.

There may be additional tax benefits (this may vary per client, consult your tax consultant)

Excellent loan for home improvements

Get cashout above 80% and avoid Private Mortgage Insurance

The 2nd Trust Deed can be a fully amortized 15 year loan or 30 year due in 15 if you prefer

No Private Mortgage Insurance needed over 80% loan to value. This is a considerable savings!

2nd's come with Checks and Credit cards for the equity line. Use this instead of your personal credit cards and pay a lower interest rate!

 

Purchase Opportunies

No Mortgage Insurance required

Interest may be tax deductible (Consult your tax advisor)

Come in with a lower down payment and still avoid Private Mortgage Insurance

Easier qualifying! Debt ratio allowed on the 2nd T.D. is 45%

If you would like further information on this loan, please E-mail Patricia Barmatz.

If you would like to be pre-qualified for this loan, please click here.

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