In order to avoid the requirement to purchase private mortgage insurance when the loan-to-value is greater than 80%,a buyer may be able to take out a first mortgage for 80% or less and couple it with a second mortgage to account for the remainder of the necessary funds.

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This strategy is known as a piggyback mortgage and allows the buyer to avoid private mortgage insurance (PMI) by taking out a first mortgage for 80% or less and a second mortgage for the remaining balance. This way, the loan-to-value (LTV) ratio is kept at 80% or below, which does not trigger the requirement for PMI.

In Order to Avoid the Requirement to Purchase Private Mortgage