In recent years, mortgage lenders responded to the demand from home buyers who were unable to put 20 percent down on their purchase and were looking to avoid the private mortgage insurance (PMI) requirement that would typically accompany such a loan by developing a second mortgage that is created simultaneously with the first mortgage in an amount of ten percent of the value of the home. This enabled the borrower to obtain 90 percent financing while avoiding the additional cost of PMI. These loans are more commonly referred to as:

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Piggyback mortgage loans are second mortgages that allow homebuyers to avoid PMI by financing 90% of the home's purchase price with a first mortgage and a second mortgage for the remaining 10%. They are also known as 80-10-10 loans, as the first mortgage is for 80% of the home's value, the second mortgage is for 10%, and the remaining 10% is the down payment.

In Recent Years, Mortgage Lenders Responded to the Demand from Home