I'm in the market for my first house but I have only enough money to put down 10 percent. Can a 'piggyback loan' help me?
A piggyback refers to buying a property using more than one mortgage loan. Typical piggybacks are 80-10-10 loans or 80-15-5 loans. The first number is the portion of the purchase price financed by the first mortgage; the second number is the portion provided by the second mortgage; and the third number is the down payment paid by the home buyer. Another variation is the 80-20-0, a zero-money-down loan in which the first mortgage provides 80 percent and the second provides 20 percent of the financing. Piggyback loans usually have higher interest rates than standard mortgages, but allow home buyers who put down less than 20 percent to escape paying private mortgage insurance.