Do you want a second mortgage, but want to pay a minimal down payment?
80/15/5 loans, loans that are only available in Texas and Colorado, are sometimes called combination financing or piggyback loans and offer an affordable way to provide financing for a purchase, refinancing, home improvement, or debt consolidation transaction.
This is a loan which carries a second mortgage for up to 15% of the purchase price of the property. It is usually used when wishing to avoid PMI insurance or to keep your first mortgage under the FNMA/FHLMC limit to avoid Jumbo rates. The borrower puts 5% as a down payment and then finances a first mortgage up to the FNMA/FHLMC limit and a second mortgage of up to 15% of the purchase price. Other variations are 80/10/10 or 80/5/5. The borrower has a wide range of mortgage options on this type of loan, which include fixed rate or ARMS.