Avoid Paying for Private Mortgage Insurance
Having two mortgages is sometimes a better option than having only one. A second mortgage that is called PiggyBack Mortgage can help you avoid paying for Private Mortgage Insurance or PMI that is needed to protect the lender of the loan when you do not have at least 20% money of the home’s purchase price for down payment.
PMI premium is an extra cost that increase the amount of your monthly payments, so it is good to know that it can be avoided. But is a second loan really a better choice for you? The simplest way to answer this question is the PiggyBack Mortgage Calculator! Do not hesitate to use it and quickly find out what is the most cost effective mortgage plan for you: The PiggyBack Mortgage Calculator can help you make a thoughtful decision and quickly estimate your potential monthly savings!
What is PMI and how can be avoided?
Buying a home is often impossible without a home loan or mortgage. Lenders will ordinarily require at least 20 % down payment on a house you want to buy, but most people do not have that kind amount of money. Fortunately, there is an alternative: you can get a loan with a less than 20% down payment, but in that case you are required to pay Private Mortgage Insurance (PMI) until you reach 20% equity.
Banks and other lenders do not like risk, so they protect themselves and their additional risk for financing more than 80% of the home’s value with different risk-management tools. PMI protects them against loss in case that you default on your home loan. But paying for PMI is not the only option! With PiggyBack Mortgage – the second loan that can ‘piggybacks’ your first loan – you can avoid paying PMI and sometimes save a lot of money. PiggyBack Mortgage Calculator can help you decide which option is the best for you!
Choose The Piggyback Mortgage Scheme That Suits You Best
The first mortgage usually covers 80% of the home’s purchase price and the rest 20% of it can be covered by down payment, piggyback mortgage or the combination of both. The common schemes of piggyback mortgages are 80-15-5, 80-10-10 or 80-5-15, where the first number stands to the percentage of the primary mortgage, the second number represents the second loan and the third number is the percentage of your down cash. The down payment can be anywhere from 5 to 15% and the rest of the value is covered by Piggyback mortgage.
If you do not have 20 % for down payment, paying PMI premium every month is not the only option you have! There are other options, and PiggyBack Mortgage is one of them!
PiggyBack Mortgage or PMI? – Calculate the Best Option for You
Do you want to avoid paying Private Mortgage Insurance (PMI)? Use PiggyBack Mortgage Calculator and get the whole picture of your financial options. The combination of the first and second mortgage can help you avoid paying PMI and sometimes saves you a great amount of money.
However, the PiggyBack Mortgage has usually a higher interest rate and is non-cancellable, so it is not always a better option. With the PiggyBack Mortgage Calculator you can easily and quickly compare different mortgage schemes and realistically estimate your financial situation. You can compare your options and find out the most suitable mortgage opportunity for yourself.
The Pros and Cons