Investor Glossary-piggyback loanInvestor Glossary-piggyback loanInvestor Glossary-piggyback loanInvestor Glossary-piggyback loanInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Piggyback Loan

The HTML to link to this page
 

A piggyback loan is a second mortgage used to add to the first mortgage on a home for which you need to finance more than 80 percent. It "piggybacks" onto the first mortgage simultaneously. This first mortgage covers 80 percent of the home's price. The piggyback loan then covers the remainder of the financing. A common type of piggyback loan is the 80-10-10, which has a 10 percent down payment and a 10 percent piggyback loan. A significant advantage of a piggyback loan is that it does not require you to carry private mortgage insurance (PMI). Instead of paying a PMI premium, the extra payment for the piggyback loan builds equity. The interest on a piggyback loan is generally higher than the rate on the first mortgage, but a piggyback loan sometimes costs less than a single mortgage for over 80 percent that also requires PMI. So, stacking the small mortgage of a piggyback loan can significantly reduce a borrower's monthly payments. Additionally, piggyback loan payments are also tax deductible.



Rate this piggyback loan definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: implied volatility, EBITDA, minority interest, VIX, class C shares, 1035 exchange, real GDP, 401a, labor relations, per diem, required rate of return, reverse mortgage, stock market close, inflation, LIBOR, margin rate, 144a, debt service coverage, diluted share, in escrow, dividends payable, retained earnings, option premium, Key Rate Duration, quality assurance, FTSE, liquidity ratio, irrevocable trust, command economy, deferred revenue, wholly-owned subsidiary, cancelled check, covered put, average price per share, APR, Zero Cost Collar, 1031 exchange, current ratio, FICO score, balance sheet, annual return, stock split, deferred tax, ex-dividend date, phantom income, ex-dividend, open position, risk management, limit order


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use