On June 13, 2014, I introduced First Home Mortgage’s 80-15-5 piggyback loan product on my blog and the response has been overwhelming. People from all over the country have emailed or called me as this product is very rare and they haven’t been able to find it in their markets.
Most of the inquiries related to this product have come from real estate investors. Because their cash is tied up in real estate, they don’t have 20% down at the moment. However, they know they will have that cash relatively soon. This product is a good fit for them. The only issue I’ve run into with investors is that they cannot currently have more than three mortgaged properties if they want to qualify for this product. They can own more than three, but three is the limit as far as financed properties are concerned.
The other usual suspects are borrowers who only have 5% down and want to lower their loan amount so the loan is not considered a jumbo mortgage. Rates are usually lower and rules for qualifying are easier as well.
Finally, the other group of borrowers simply detest paying for private mortgage insurance. They plan on paying off the second loan of 15% aggressively and saving money that would have gone towards mortgage insurance in the process.
I applaud these savvy consumers for using the internet to explore alternative financing options. Every lender has access to unique financing products, so it’s wise to ask around and see if there’s a product out there that would be a good fit for your short and long term financing goals. At First Home Mortgage, we have many unique product offerings like our 5% down jumbo and other piggyback financing options.
Feel free to email me if you have general mortgage questions or questions about using an 80-15-5 for your next residential purchase.