Piggyback Loan

The Piggyback Loan is another loan that offers a low down payment as well as a way to avoid PMI (private mortgage insurance). It and can be used to finance 80% of the home’s purchase price. For instance, if a home buyer only has enough cash for a 5% down payment it would look like this. 80/15/5. The “80″ refers to 80% of the purchase price. The “15″ is the second mortgage which finances 15% of the purchase price. The “5″ is the down payment. Another one you could do would be 80/10/10. Some lenders will allow 80/20 where the second mortgage covers the rest of the purchase price with no down payment needed.

Cons

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