The Second Trust (Piggyback) Loan Hawaii

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 Hawaii.

Local Companies

Accubanc Mortgage
808-593-5700
1221 Kapiolani BlvdSte 347
Honolulu, HI
Honolulu Federal Credit Union
(808) 687-8565
1001 Kamokila Blvd Ste 104
Kapolei, HI
American Financial Mortgage Company
808-522-0925
1188 Bishop Suite 3401
Honolulu, HI
First Horizon Home Loans
808-275-8000
1099 Alakea St Suite 2200
Honolulu, HI
Shirley Suguitan Legacy Mortgage
808-268-0730
1999 Main Street
Wailuku, HI
Hickam Federal Credit Union
(808) 423-1391
590 Farrington Hwy Unit 501
Kapolei, HI
Valley Isle Mortgage Inc.
(808) 573-0022
3240 Old Haleakala Hwy
Makawao, HI
Navy Federal Credit Union
(808) 253-7440
338 Kamokila Blvd Ste 104
Kapolei, HI
Inter Island Home Loans Powere
(808) 524-0960
55 Merchant StSte 1550
Honolulu, HI
Charter Financial Services
808-945-3366
1357 Kapiolani Blvd
Honolulu, HI

provided by: 

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

Accubanc Mortgage

808-593-5700
1221 Kapiolani BlvdSte 347
Honolulu, HI


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