Split Loan Financing

At PROLEND HOME LOANS, we understand that every homebuyer’s financial situation is unique. That’s why we offer Split Financing Loans, providing flexible and customized solutions to help you achieve your homeownership goals. With years of experience in mortgage lending and a wide range of options, ProLend Home Loans is your trusted partner in securing the financing you need.

Split Financing Loans, also known as piggyback loans or combination loans, involve splitting the mortgage into two separate loans to help borrowers avoid paying private mortgage insurance (PMI) and/or make a lower down payment. Typically, the primary mortgage covers a percentage of the home’s purchase price, while a second mortgage (or home equity line of credit) covers the remaining balance.

Second Mortgage

The second mortgage, or piggyback loan, is the second loan used to finance the remaining balance of the purchase price after the primary mortgage. This loan is usually structured as a home equity line of credit (HELOC) or a fixed-rate loan. The second mortgage typically covers the portion of the purchase price not financed by the primary mortgage, up to 20% of the home's value.

Primary Mortgage

The primary mortgage is the first loan used to finance a portion of the home's purchase price. This loan typically covers the majority of the purchase price, often up to 80% of the home's value. Borrowers may opt for a fixed-rate or adjustable-rate mortgage for the primary loan.

Lower Down Payment

Split financing loans allow borrowers to make a lower down payment compared to conventional mortgages. Instead of needing to put down 20% of the purchase price, borrowers may be able to make a down payment as low as 10% or even 5% by combining the primary and second mortgages.

Avoiding PMI

One of the primary reasons borrowers choose split financing loans is to avoid paying private mortgage insurance (PMI). PMI is typically required when the down payment is less than 20% of the home's purchase price. By using a second mortgage to cover part of the purchase price, borrowers can avoid PMI while still making a lower down payment.

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Loan Limits

The total loan amount for split financing loans is typically limited by the lender's criteria and the borrower's qualifications. Borrowers should be aware of any loan limits and ensure they can secure financing for the desired purchase price.

Payment Structure

Split financing loans typically involve two separate monthly payments: one for the primary mortgage and another for the second mortgage. Borrowers should budget accordingly to ensure they can comfortably afford both payments.

Interest Rates

The interest rates for split financing loans can vary depending on the terms of each loan. The primary mortgage may have a different interest rate than the second mortgage. Borrowers should carefully consider the interest rates and terms of both loans to determine the overall cost of financing.

Overall, split financing loans offer flexibility and affordability for borrowers who want to avoid PMI and make a lower down payment while purchasing a home. However, borrowers should carefully consider the terms and costs of both loans before choosing this financing option.

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Split Loan Financing

Split Loan Financing

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20 Gleance Rd,Watford, London

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