80-10-10 Piggyback Mortgage Loans

Why Get A Piggyback Loan?

A piggyback mortgage is a home financing strategy that uses two loans instead of one. It helps you avoid private mortgage insurance and minimize upfront costs. The first loan covers most of the purchase price, while the second loan allows for covering part of the remaining balance. This financing approach is also known as an 80-10-10 loan. It helps buyers qualify with less cash available while keeping monthly payments affordable. At LBC Mortgage, we guide you through piggyback loan options to effectively meet your goals and budget.

A piggyback loan helps you avoid private mortgage insurance as you can put down just 10 percent. Instead of paying PMI on a single high-balance loan, you can split the financing into two mortgages. So you will be able to lower your monthly payment and reduce long-term costs.

This option also helps you remain within conforming loan limits to avoid jumbo loan pricing. By keeping the first mortgage at 80 percent of the home’s value, you may qualify for lower interest rates. As a result, you can successfully compete in California’s high-cost markets without threatening your savings.

At LBC Mortgage, we assist with piggyback loans to fulfill your financial goals and long-term plans. Our team compares scenarios and explains all numbers clearly. We negotiate competitive terms with different lenders. So our specialists ensure that your financing works for you today and in the future.

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Key Advantages of Piggyback Mortgages

Avoid Private Mortgage Insurance

One of the major benefits of a piggyback mortgage is avoiding private mortgage insurance. By keeping your first loan within 80 percent of the home’s value, you can eliminate PMI. That will also reduce your monthly payment. At LBC Mortgage, we help you save money over time while keeping more cash available for other expenses.

Lower Upfront Costs

A piggyback loan allows you to buy real estate with a smaller down payment compared to a traditional 15-20 percent down loan. Instead of investing a large amount of savings, you split the financing into two loans. This strategy preserves your financial stability as you may focus on renovations, reserves, or future investments.

Competitive Interest Rates

Keeping your primary mortgage within conforming loan limits will secure more competitive rates for you. In high-cost California market, this can make a major difference in your overall borrowing costs. That’s why a piggyback approach is best for avoiding higher jumbo loan pricing.

Greater Buying Power

With a piggyback mortgage, you may qualify for a higher purchase price it does not increase your out-of-pocket costs. This can give you additional advantages when making offers in competitive markets. It also provides flexibility needed to balance monthly payments and upfront payments.

Expert Loan Structuring

At LBC Mortgage, we develop piggyback mortgage solutions based on your financial requests. Our team compares different lender options and combines both loans to work together as intended. So we focus on clear recommendations and fast communication to give you a competitive edge in California.

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When a Piggyback Mortgage Makes Sense

A piggyback mortgage is reasonable when you want to avoid private mortgage insurance and prefer not to put down 15-20 percent. This loan type allows you to keep your first loan at 80 percent of the home’s value. So you may finance the remaining amount with a second loan. It works well for buyers who want lower monthly costs without a negative impact on their cash reserves.

It can also be an effective option in California’s high-cost market as home prices push borrowers close to conforming loan limits. If the loan is selected properly, you may avoid jumbo financing and secure more competitive rates. So this approach often increases buying power because payments remain affordable.

A piggyback loan may fit buyers with strong credit and stable income who want flexibility. If you have the assets to cover a 10 percent down payment and qualify for two loans, this option provides the maximum flexibility. It also helps preserve liquidity for investments, renovations, or emergency reserves.

At LBC Mortgage, we analyze your financial profile to determine whether a piggyback approach is right for you. We compare it with other options to maximize your savings and long-term benefits. Our team ensures you choose the right loan for your purchase rather than the most common one.

How to Qualify for a Piggyback Loan

To qualify for a piggyback loan, you need good credit, stable income, and a balanced debt-to-income ratio. Most lenders look for a credit score of at least 680. However, higher scores may secure even better rates and terms for clients. You must also show consistent employment and sufficient income. They will confirm you can manage both mortgage payments in the future.

Lenders review your assets to ensure your financial ability to cover the down payment, closing costs, and required reserves. As a piggyback mortgage involves two loans, underwriting should be more detailed than with a single conventional loan. Our specialists will assist in preparing your financial profile to maximize your approval chances and ensure competitive pricing.

At LBC Mortgage, we evaluate your current financial conditions to suggest potential adjustments for your application success. We examine both loans in a complex manner to match you with lenders offering relevant piggyback options. Our team will answer your questions to help you qualify smoothly and close on time.

Secure Your Piggyback Loan with LBC Mortgage

At LBC Mortgage, we specialize in organizing piggyback loans that help you avoid PMI and 80-10-10stay within the existing conforming limits. As a result, you will be able to preserve more cash in your pocket. As a broker, we collaborate with numerous lenders to secure competitive rates and appropriate terms for both loans. Our team analyzes every detail to make sure your financing supports all your long-term goals.

We will work with you throughout pre-approval until closing. We will use clear communication and fast turnaround to minimize potential issues. Our professionals ensure the coordination between both lenders to prevent potential delays. So your timeline may remain within agreed terms. When you choose LBC Mortgage, you gain experienced specialists who focus on client-focused strategy and a smooth closing.

Author:

Alex Shekhtman CEO & Founder, LBC Mortgage

Frequently Asked Questions

1. What piggyback loan options does LBC Mortgage offer for home buyers?

Piggyback loans are structured as two simultaneous mortgages used to finance a home purchase while reducing the need for a large single down payment. LBC Mortgage offers piggyback loan arrangements that typically follow an 80/10/10 or 80/15/5 structure. In an 80/10/10 configuration, the first mortgage covers 80% of the home’s purchase price, the second mortgage covers 10%, and the borrower provides a 10% down payment.

This structure is commonly used to avoid private mortgage insurance (PMI), which is typically required when a conventional loan exceeds 80% loan-to-value. By keeping the primary mortgage at or below 80% LTV, borrowers may eliminate monthly PMI costs. The second mortgage is often structured as a home equity loan or home equity line of credit with separate terms and interest rates. Piggyback loans are most often used for primary residences and may be especially useful in higher-cost California markets where home prices exceed typical conforming thresholds. This financing strategy allows buyers to manage upfront capital while maintaining competitive long-term mortgage terms.

2. How does a piggyback loan work when purchasing a home?

When purchasing a home using a piggyback loan, the borrower secures two loans simultaneously at closing. The first mortgage typically finances up to 80% of the property’s value, while the second mortgage covers a portion of the remaining balance. The borrower contributes the remaining amount as a down payment. This structure allows the primary loan to remain at or below 80% loan-to-value, which may eliminate the requirement for private mortgage insurance. The second loan may be structured as a fixed-rate home equity loan or a variable-rate home equity line of credit, depending on borrower preference and lender availability. Each loan has its own repayment terms, interest rate, and underwriting review.

Qualification involves evaluating credit score, income stability, debt-to-income ratio, and reserves, similar to conventional mortgage guidelines. Borrowers should assess the combined monthly payments of both loans to ensure affordability. In competitive housing markets, piggyback loans offer an alternative to larger down payments while maintaining financing flexibility.

3. What are the qualification requirements for piggyback loans?

To qualify for a piggyback loan, you must meet underwriting standards for both the primary mortgage and the secondary loan. At LBC Mortgage, we will evaluate credit score, income documentation, debt-to-income ratios, employment history, and available reserves to determine overall eligibility. Because piggyback loans involve two simultaneous obligations, lenders often expect strong credit profiles and stable income to offset the layered financing structure. Down payment requirements vary depending on the chosen configuration, such as 80/10/10 or 80/15/5, and may require a minimum borrower contribution even when avoiding PMI.

In addition to standard income documentation, borrowers must demonstrate the capacity to manage both monthly payments. Reserve requirements may include several months of total housing payments after closing. Property eligibility typically follows conventional guidelines and includes appraisal verification. Piggyback loans are often best suited for borrowers who have sufficient income to support dual loan payments but wish to minimize upfront capital or avoid ongoing mortgage insurance costs.

4. When should a home buyer consider using a piggyback loan?

A piggyback loan may be appropriate for you if you want to avoid private mortgage insurance while maintaining flexibility in upfront capital allocation. Buyers who can comfortably manage two loan payments may find that eliminating PMI offsets the cost of the second mortgage over time. This structure can also benefit borrowers who wish to preserve liquidity for reserves, renovations, or other financial priorities instead of allocating a larger single down payment.

Piggyback loans may be particularly useful in high-cost areas where home prices approach or exceed conforming loan thresholds. However, borrowers should evaluate interest rates on the second loan, potential variable-rate exposure, and long-term payment structure before proceeding. The strategy works best when your credit profile is strong and income stability supports the combined debt load. When structured responsibly, piggyback loans can provide a balanced approach to home financing in competitive real estate environment.