Is A Piggyback Mortgage Right For You?
Are you purchasing a home and trying to determine the mortgage options that make the most financial sense for your family? The truth is, selecting the right type of mortgage is a really important decision, but you may not know where to begin. You are not alone.
We host a variety of products that can help suit your individual needs. Some of the benefits are:
LOW DOWN PAYMENTS
Our Piggyback loans allow you to preserve liquidity with low down payments of only 5% on a home purchase.
MORE CASH OUT
Unlock your equity with up to 95% total financing with a cash out refinance plus a post-closing home equity line.
AVOID JUMBO LOANS
By keeping your first mortgage under the conventional loan limit, our Piggyback loans can help you avoid Jumbo mortgage requirements and higher rates.
NO MORTGAGE INSURANCE
Save money and avoid costly mortgage insurance (PMI) by combining an 80% 1st mortgage with a 2nd mortgage or HELOC.
LARGER LOAN AMOUNTS
Your piggyback mortgage can be up to $250,000, with no limit on the total of the two mortgages.
ANY OCCUPANCY TYPE
Our Piggyback mortgages can be used for primary residences, second homes, or investment properties.
What Our Clients Have To Say:
"I am a successful freelancer who after a few years of major growth decided I was ready to take the next step and buy my dream home. The problem was I was told by multiple lenders I could not get a mortgage because of my tax returns which made me feel stressed and overwhelmed. I thought all hope was lost until I scheduled a consultation with Andrew Tamajon. He completely understood my situation and guided me through options I didn't know I had. Ultimately, Andrew and his team helped me close on my dream home. I would absolutely recommend Andrew Tamajon and his team to anyone, especially if you are self-employed!"
“As business owners, we didn't have the type of income documentation most banks needed to get us approved for the loan amount we needed. We were worried about getting dragged through the mud and losing our time and money working with the wrong lender. After meeting with Andrew Tamajon and finding the right option that made sense for us and our source of income, Andrew gave us confidence that our loan would close. Not only did we get approved, we ended up with a down payment far lower then we were hearing from other banks. We have already started recommending Andrew Tamajon to fellow business owners!”
Christian and Michelle B.
"Before working with Andrew Tamajon I applied for a mortgage with another lender but later got denied. Getting denied for a mortgage was unexpected and defeating. Looking back, I should have realized that most loan officers out there just don't understand self-employed income. Andrew Tamajon knew right away what I was going through and his experience working with other business owners gave me the confidence I needed to move forward. I am happy to say I am now a proud self-employed home owner and I owe it to Andrew Tamajon. I'd recommend him to anyone who is self-employed!"
Getting a Loan with LoanBud
is as Simple as 1, 2, 3...
Schedule a Consultation
Speak with one of our experienced loan officers who will understand your goals and help create a plan.
Know Your Options
Discover what options are available to you and have confidence knowing your income has been reviewed up front.
Close Your Loan
Relax as we guide you through a stress-free loan process so you can close on time.
What is a piggyback loan?
A piggyback loan allows you to buy a house using two mortgages at the same time. This can provide advantages such as a lower down payment, avoiding private mortgage insurance (PMI), and avoiding a jumbo loan.
Piggyback loans usually include three separate parts (80/10/10):
- A first mortgage comprising 80% of the price
- A second, “piggyback” mortgage comprising 10% of the price
- The remaining 10% of the home price covered by your down payment
LoanBud offers piggyback loans up to 95% loan-to-value, where the primary mortgage covers 80% but the second mortgage covers 15%, allowing for only a 5% downpayment (80/15/5)
In most cases, the primary mortgage will be a conventional 30-year fixed rate mortgage and the piggyback mortgage will be a home equity line of credit (HELOC). Many lenders will require you to take out private mortgage insurance (PMI) if their down payment is under 20% of the total cost of home. Piggyback loans can help eliminate PMI requirements, which makes them an attractive option if you're looking to avoid additional fees and charges.
What is the difference between a jumbo and piggyback loan?
Most jumbo loans require larger down payments of 20% or more. LoanBud's 80/15/5 or 80/10/10 Piggyback mortgages can be used to avoid jumbo loans by obtaining a 1st mortgage up to the county loan limit along with a 2nd mortgage or HELOC. This strategy allows you to effectively obtain a jumbo mortgage with as little as 5% down. By putting less down, you can keep your money in the market, use it for renovations, or have a bigger safety net.
LoanBud Piggyback mortgages can also be used as a refinance to maximize cash out.
Cheaper Than FHA
Although FHA loans allow a low down payment of 3.5%, it comes with a steep price tag. For example, you are charged an upfront mortgage insurance premium (UFMIP) of 1.75% of the base loan amount, a closing cost that gets rolled into the mortgage.
FHA borrowers also pay a monthly mortgage insurance premium (MIP) which is typically .85% (annual fee, paid monthly) for the life of the loan.
LoanBud Piggyback loan allows you to avoid both of these costs, saving you thousands of dollars in both closing costs and monthly payments.
What are the loan requirements & qualifications for a piggyback loan?
When applying for a piggyback mortgage, you are typically applying for two loans at one time, making qualifying a bit harder than for a single conventional mortgage. However a piggyback loan can offer cost saving advantages for those who can qualify.
Here is some of the criteria you may need to meet in order to qualify for a piggyback loan:
- A credit score over 680, ideally over 700
- A debt-to-income ratio under 43%
- Two monthly payments
- Two interest rates, different sets of terms
Who is a good candidate for a piggyback loan?
Piggyback loans are most common when buying a higher value home, but you want to avoid a large down payment. For some buyers, a piggyback home loan is the best option available, but not for all.
Piggyback Loans are best if you:
- Have good credit (at least 680 FICO)
- Want to put less money down to preserve liquidity
- Want to avoid private mortgage insurance (PMI).
- Want to avoid a jumbo loan due to the strict qualifying requirements
Schedule a consultation with one of our experienced loan officers to determine if a piggyback loan is right for you.
How can I avoid paying mortgage insurance (PMI)?
Yes, there are two ways to refinance a piggyback loan.
If you have enough equity, you can pay off your second loan at the time you refinance, allowing you to consolidate loans into one.
The second option is to refinance your first mortgage and leave your second mortgage (the smaller “piggyback loan”) untouched. This option will require the approval of your second mortgage lender.
How do I get a piggyback loan?
To get a piggyback loan we recommend you will first speak with a loan officer with experience handling piggyback loans. You will need to apply for a primary mortgage to cover 80% of the home's value. You’ll then need to apply for a secondary, “piggyback”, mortgage. Schedule a consultation to speak with a LoanBud loan officer and learn more about the process of applying for a piggyback loan.
How Can You Purchase Your Home With A Piggyback Mortgage?
At LoanBud, we know you are the kind of people who want to be successful and plan for your future. In order to be that way, you need to find a mortgage that allows you to put down less than 20% on your home purchase. The problem is, most lenders will then increase your payments by forcing you to pay monthly mortgage insurance, will charge you expensive closing costs, and will offer you higher interest rates, which makes you feel frustrated and defeated. We believe charging extra closing costs or making people pay mortgage insurance is just wrong. We understand how frustrating it can be for those who want higher total financing on their home. That’s why we allow our customers to get piggyback 1st & 2nd mortgages or HELOC's up to 95% of the home's appraised value.
Here’s how it works:
1) Schedule a Consultation
2) Know Your Options
3) Close Your Loan
Request a free consultation today so you can stop worrying about how to achieve your financial goals and be happy in your new home.