Purchase Money 2nd

PIGGYBACK LOANS Are AN AFFORDABLE FINANCING OPTION FOR HOME BUYERS WHO PREFER NOT TO PAY PMI.

 

Combination Finance, also known as a "Piggy-Back Loan," is where you are essentially loaned a portion of your down payment to avoid PMI (Private Mortgage Insurance) or to maintain a certain 1st mortgage loan amount or payment.

WHAT IS A PIGGYBACK LOAN?
A Piggyback Loan is a type of mortgage loan that a homebuyer would take out in addition to their main mortgage loan. Instead of financing a home purchase with just one mortgage loan, you're doing so with two. The Piggyback Loan is considered the second loan and is usually of a smaller amount than your main mortgage loan. The purpose of a Piggyback Loan is to provide the funds towards your home's down payment amount so that you will not have to pay PMI (Private Mortgage Insurance).

WHAT ARE THE FEATURES OF A PIGGYBACK LOAN?

• Purchase at a JUMBO price point with a smaller down payment. A conforming loan offers more options and competitive rates than a jumbo loan. A combo loan can help finance nearly all of the purchase price while staying within the maximum conforming loan limit of $766,550.00. For example, close with a 1st mortgage for $766,550.00, a smaller 2nd mortgage plus a small down payment for the balance.
• No mortgage insurance. Mortgage insurance that is paid as part of a home loan is no longer tax-deductible and can force unwanted up-front or monthly costs. You may use a Purchase Money 2^nd to avoid monthly mortgage insurance with only a small down payment.
• Tax deductions. With a second mortgage, you may be able to obtain a greater tax deduction for mortgage interest than with mortgage insurance. You should consult your tax adviser.
• Waive the escrow account. Manage annual property taxes and homeowner's insurance to be paid directly from the homeowner as opposed to paying monthly with the mortgage payment.
• No prepayment penalty. Pay down the balance on the 2nd mortgage without penalty.

This is not a commitment to lend; you must submit additional information for review and approval. Rate, Annual Percentage Rate (APR), and terms are subject to change without notice. Certain restrictions apply to all programs. See your FLB Mortgage Loan Officer for complete program guidelines, loan application, applicable fees and annual percentage rates (APRs) for all loan programs. Full underwritten approval is required, and all loan approvals are subject to credit, income and asset review and approval. Bank NMLS#1215182