Piggyback Loan & HELOC
A second mortgage, often a home equity line of credit (HELOC), taken alongside the first mortgage on the same property to reduce upfront costs such as the down payment or private mortgage insurance.
- 80/10/10 structure
- 80/15/5 structure
- First mortgage at or below 80% LTV
- 680+ credit score on most programs
What Is a Piggyback Loan or HELOC?
A piggyback loan is a second mortgage, often a home equity line of credit (HELOC), taken alongside the first mortgage on the same property. It is designed to reduce upfront costs such as the down payment or private mortgage insurance that lenders require on a first mortgage above 80% loan-to-value.
.jpg?width=800&height=800&name=Mortgage%20Loan%20(10).jpg)
TAG · Piggyback & HELOC Financing
How Does a Piggyback Loan Work?
In an 80/10/10 structure, the first mortgage covers 80% of the purchase price, the piggyback second covers 10%, and the borrower brings a 10% down payment. Some programs offer an 80/15/5 structure, which reduces the down payment to 5%. The second lien can be a fixed-rate second mortgage or a HELOC, depending on the program.
80/10/10
10% down payment
- First mortgage 80%
- Piggyback second 10%
- Down payment 10%
80/15/5
5% down payment
- First mortgage 80%
- Piggyback second 15%
- Down payment 5%
What Are the Qualifications for a Piggyback Loan?
- The same core requirements as a traditional mortgage: a stable two-year work history, no serious credit issues, and in some cases reserve funds
- A credit score of 680 or above on most programs
- A down payment set by the structure: 10% on an 80/10/10 program, 5% on an 80/15/5 program
Piggyback Loan Benefits
Avoid mortgage insurance.
Keeping the first mortgage at or below 80% loan-to-value removes the PMI requirement, which can save a borrower a significant amount over the life of the loan.
Smaller down payment.
Buyers can get into a home with less cash up front than a single loan at the same total financing would require.
Stay under conforming limits.
Splitting a larger purchase into a first and second lien can keep the first mortgage within conforming limits instead of moving to a jumbo loan.
Start your application now!
Prefer to talk? Call (305) 503-8655 or message us on WhatsApp.
Tag Lending Group, LLC · NMLS #2329372 · Equal Housing Lender.
Piggyback Loan Benefits
- Avoid mortgage insurance. Keeping the first mortgage at or below 80% loan-to-value removes the PMI requirement, which can save a borrower a significant amount over the life of the loan.
- Smaller down payment. Buyers can get into a home with less cash up front than a single loan at the same total financing would require.
- Stay under conforming limits. Splitting a larger purchase into a first and second lien can keep the first mortgage within conforming limits instead of moving to a jumbo loan.
.jpg?width=1000&height=1000&name=Mortgage%20Loan%20(10).jpg)