Piggy-Back (or First and Second) Mortgages

“Piggy-Back” mortgages, also known as First and Second mortgages, are often used to eliminate Private Mortgage Insurance (PMI) requirements. The second mortgage finances the down payment portion of the home loan.

These types of loans are often promoted as 80/15/5s or 80/10/10s, where the first number represents the percentage of the purchase price being financed on the first mortgage; the second number represents how much down payment is being financed on the second mortgage and the third number represents the percentage down payment.  While this does require two separate mortgage payments, the combination of both payments can often be less than that of a single mortgage loan with the cost of PMI included.