Can’t Afford 20 Percent Down?

Those who can’t afford a down payment of at least 20 percent, usually pay a Private Mortgage Insurance (PMI) to offer lenders some security if you default on the loan. It also allows borrowers to place less of a down payment, but unfortunately the PMI usually adds at least one half a percent to the mortgage cost.

Loans That Require No Down Payment

Piggyback loans offer financing to borrowers that cannot afford the standard 20% down. They are really two loans, the first loan covers 80% and the second loan helps with the down payment and will usually have a higher interest rate. The payment should be less than a single loan with PMI.

An 80-10-10 loan is where the first loan equals 80 percent, the second loan covers 10 percent and the last 10 percent is covered by your down payment.