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recently i was pre-approved for a mortgage with just 5% down. this was for two loans actually, one is conventional 80% with typical interest rate, and one 15% 1
by hippich 11y ago
recently i was pre-approved for a mortgage with just 5% down. this was for two loans actually, one is conventional 80% with typical interest rate, and one 15% 15 years loan at 6.5% interest rate. My plan was to pay off small one quickly and just use it to avoid selling current house before moving into new one. No PMI.
- extra88 11y agoI think that's called a "piggyback mortgage." Yours is an extreme example (sounds like you'll pay off the 15 year loan within a year) but generally used when you can pay more initially because it's easier to pay off a loan early than to pay extra on your mortgage to get to 20% equity and end mortgage insurance payments. If you can get a low enough interest, the piggyback can be preferable (to PMI) even if you're not going to pay it off early, you just have to do that math.