Piggyback loans

A way of describing a second mortgage that is “piggybacked” on a first mortgage to enable the borrower to buy a home without private mortgage insurance. The first or primary mortgage generally covers 80% of the loan; the piggybacked, or second, mortgage covers a percentage of the remainder not covered by the down payment. The interest rate on the second mortgage generally is higher than the first mortgage, but it can cost less than a mortgage that requires the buyer to pay a private mortgage insurance premium.