Piggyback Mortgage ..Are my rates normal? (PMI, credit, 30 year fixed, requirements) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

moefoe123 · 04-19-2008, 08:59 PM

We are buying a single family home in LI New York. House is $417000. We are putting down 5% and getting a piggyback mortgage. 1st mortgage is fannie mae @ 5.875 and 2nd is around 10% both are fixes for 30 years. My question is the rate on the 2nd normal and should it be a 30 year? We decided against pmi and our mortgage broker says that it is very hard to be getting piggybacks right now with the declining market and this is our best options.
Our Fico scores are 791 & 723
Should we be concerned?

Thanks in advance...

M

Daddys///M3 · 04-20-2008, 10:34 AM

Your broker is correct about the piggybacks. They are getting much harder to do and many lenders have discontinued them due to the fact that so many people are walking away and the second lien holders are getting none of their money back. That being said the rate sounds about right. However, does this broker offer FHA? Ask your broker to show you the difference between the blended rate of this piggyback as well as PITI and compare it to the FHA rate you could get as well as PITI (FHA has reduced MI requirements). It might be a cheaper option.

MomOfToo · 04-20-2008, 02:48 PM

Hello,

We were going to do that as well but our broker said that PMI is now deductable on your taxes and honestly, the amount was only a little higher like maybe $20 more for PMI. Plus PMI goes away after you reach that 20% mark. We are putting 10% down on a house that is $365K and our credit is about 740.We got a 30 year fixed for 5.85%. You have to go over both scenerios and ask ALOT of questions. Our broker knows I want to see every scenerio he can come up with so he is prepared for it. Good luck!

moefoe123 · 04-20-2008, 08:12 PM

Thanks for the quick replies...
We decided against PMI because of the declining market and wanted our money to be going into equity . The way this market is latley we figured by the time we get rid of pmi we will be refinancing.

Does it matter if it's a 15year or 30year 2nd mortgage? Am I wrong to asume if you put extra $$ down towards principal that it's the same. We will most likeley refinance after 5-7 years.

Bette · 04-20-2008, 08:47 PM

You are getting a good deal. A lot of lenders aren't even doing piggybacks to 95% (80% first, 15% second) anymore.

Who is your lender BTW?