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The Second Trust (Piggyback) Loan Alabama

The following contains housing information you should know about the second trust (piggyback) loan and if you can avoid it. Read this review if you or a loved one is interested in buying and selling real estate in Alabama.

Local Companies

HomeTown Lenders - AUBURN
770-757-6481
724 N. Dean Road
Auburn, AL

Countrywide Home Loans
334-663-3902
1530 E Glenn Ave Suite E
Auburn, AL

Wells Fargo Home Mortgage
(334) 347-8858
1210 Rucker Blvd
Enterprise, AL

First Franklin Financial
(334) 347-5795
621 Boll Weevil Cir Ste 29
Enterprise, AL

ACA Financial Services
(334) 393-8492
414 S Main St
Enterprise, AL

Advance America Cash Advance
(334) 308-1973
614 Enterprise Shopping Ctr
Enterprise, AL

Magnolia Mortgage
(334) 271-7525
5748 Carmichael Pkwy
Montgomery, AL

1st South East Acceptance
(334) 393-8302
1032 Boll Weevil Cir
Enterprise, AL

Cash Cow
(334) 348-2251
1000 Rucker Blvd
Enterprise, AL

Acceptance Capital Mortgage
(251) 340-7474
800 Downtowner Blvd
Mobile, AL

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Even if you cannot afford a 20% down payment on your house, you may still be able to cross the threshold of your dream home. Many lenders will allow smaller down payments - as little as 5% in some cases. With smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance (PMI) which means:

you may be required to make an initial premium payment; and
pay additional monthly fees on top of your regular mortgage payment

If these extra charges don’t sound appealing to you, you may consider a second trust loan or "Piggyback Loan."

What is a Piggyback Loan?

A piggyback loan is a combination of two loans that close at the same time to purchase a home. The most common piggyback loan is an 80/10/10.

80 percent of the home’s value is financed through a first mortgage.
The remaining 20 percent is equally divided between a second, piggyback loan and the down payment.

Example

Purchase Price	1st Mortgage Amount	Down Payment	Piggyback Loan Amount
$200,000	$160,000 (80%)	$20,000 (10%)	$20,000 (10%)

Piggyback Loans vs. PMI

As with every financial option, there are pros and cons associated with both piggyback loans and PMI. Choosing the option that’s best for you depends on your individual financial situation and your state’s regulations.

TIP: Before deciding to select a piggyback loan instead of PMI, you should consult with a financial professional.

Published on February 15, 2007

Read full article at realestate.com

Featured Local Company

HomeTown Lenders - AUBURN

770-757-6481
724 N. Dean Road
Auburn, AL
www.hometownauburn.net

Read more about The Second Trust (Piggyback) Loan

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Regional Articles

- Buying Commercial Real Estate Alabama

If you’re considering getting a commercial loan to purchase or renovate a building for your company, the U.S. Small BusinessAdministration’s (SBA) 504 Loan Program could be a viable option.

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Advertising	Family	Home Services	Real Estate Resources
Business Services	Fashion	Industrial Goods & Services	Retail & Consumer Services
Career	Financial Services	Insurance	Software
Cars	Food & Beverage	Internet	Technology
Computer Hardware	Franchise	Legal	Telecommunications
Construction	Health	Miscellaneous	Trade Shows
Education	Holidays	Nightlife	Travel
Entertainment	Home Appliances	Online Database	Weddings
Environmental	Home Electronics	Pets	World History