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.
While the breakdown of an 80/10/10 loan doesn’t need to break down exactly at 80%, 10%, and 10%, they provide a general structure for how a borrower can avoid paying private mortgage insurance. Here is what each section of the loan covers:
There are several major benefits for getting a piggyback loan, as opposed to a FHA loan. Here are some of the benefits:
The requirements for 80/10/10 have become more strict since the 2008 mortgage crisis, due to the added risk of lenders putting out a second loan. Piggyback loans require a high credit score. While it can vary from lender to lender, you probably want to have a credit score of at least 680.
Call our experts today, to see if you quality for an 80/10/10 loan!