Benefits of a Piggyback Mortgage Loan

Borrowers can reap a lot of advantages from a piggyback mortgage loan or sometimes called as simultaneous 2nd mortgage loan. If you are planning to apply for this type of home financing these are the benefits it offers:

  • Your chance of qualifying for the financing plan is higher since the purchase price of the home is financed by two or more lenders and the loan risk is shared by the involved parties.
  • You can obtain the loan with a zero mortgage down payment or less than 20%.
  • Since the loan is originated and closed with your first mortgage, the loan processing and closing is combined into one.
  • A private mortgage insurance which many buyers cannot afford is not required. Therefore, you do not have to deal with securing funds to pay for it.
  • The interests of your first and second mortgages are tax deductible.
  • Because a PMI is not a requirement, your monthly payment for a piggyback mortgage loan may be lower compared with a high-loan-to-value first mortgage.
  • The loan term is flexible, usually 15 to 30 years for the first mortgage and 10 to 20 years for the second mortgage.