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Should I get a piggyback loan to avoid PMI or will paying PMI with lower rates be cheaper?

in general by HConra_967_189 from Littleton, Colorado. Oct 18th 2012 Reply


Patrick McCarthy (PatrickM)
#25 ranked lender in Ohio - 196 contributions

Most banks will not loan over 90% of the appraised value or purchase price for all mortgages. Depending upon what your equity position is on a refi or down-payment on a purchase, will dictate which would be better. You can buy out the PMI on a conventional loan a few ways. You can pay a one-time up front premium and have the lower rate. You can take the monthly PMI, have the lower rate and petition to have it dropped after 24 mos and 22%+ equity. You can also take a rate a bit higher and have no monthly PMI. Again, this would depend upon the true loan to value ratio as to whether this is the best option or trying to get a bank to lend a 2nd mortgage or HELOC behind the new 1st mortgage. Hope this helps.

Oct 18th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,550 contributions

There are lenders out there doing 2nds, however I have not seen where you can finance 100%, 80/20 for example.. That product has been gone for a while now. Although we do have a lender that will do 80/10/10 (you put 10% down).. And there is also a lender paid mortgage insurance option as well as a single premium paid up front product. So there are other ways to avoid paying MI, so you should get several quotes on all the available programs and compare them side by side. The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Oct 18th 2012
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Todd Tholl (toddtholl@leader1.com)
#4 ranked lender in Iowa - 239 contributions

Piggy back loan is the better way to go.

Oct 19th 2012
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Kim Clancy (TheClancyGroup)
#56 ranked lender in Colorado - 9 contributions

That's a great question and one that doesn't have a black and white answerIn short, you can no longer get 100% financing through an 80/20 style loan (1st w/a piggy back 2nd) and with the new guidelines, you actually will need to put down MORE MONEY doing a combo loan that just a straight 1st mortgage.There are options to eliminate the monthly mortgage insurance w/out putting down 20% or getting a 2nd mortgage and I'd love to talk with you about them. I can also provide you with payment options so that you can see what the difference is with or without the monthly MIPlease shoot me an email or give me a call and I'd love to help!Kim720-353-4578kclancy@firstcal.net

Oct 18th 2012
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Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

Easy...you can't do piggy back loans anymore.

Oct 18th 2012
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Will Rogers (WRMtg@comcast.net)
#57 ranked lender in Colorado - 3 contributions

You can get Lender Paid MI and loose the monthly MI payment. With rates this low it may increase your rate a little.

Oct 18th 2012
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

No more piggy back!

Oct 18th 2012
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Allen Lundberg (ColoLender)
#20 ranked lender in Colorado - 24 contributions

Great Question... I also agree that the lenders stating that there are no piggybacks are wrong. There are a number of banks nearby that will go to 90% combined loan to value and a couple others going to 85%. I believe that the best way to decide is to compare payments from the different options. 1st and 2nd combo, monthly MI and single premium MI. I would be happy to run numbers and give you my thoughts. 720-203-9871 or allen@rockymtnmtg.comThanks, Allen, Centennial Colorado

Oct 18th 2012
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