Are Two Home Loans Cheaper Than One?

By ANYA MARTIN

To buy a house, some people are going through double the trouble—getting two conventional loans instead of one jumbo mortgage.

Called “piggybacking,” the practice helps buyers avoid the higher interest rates and larger down payments that typically come with jumbo loans, defined as above $417,000 in most parts of the country and $625,000 in high-cost areas.

Piggybacking was popular in the mid-2000s before the mortgage crisis, and it received some of the blame for facilitating home purchases with no or little money down, said Randy Carver, president of Mentor, Ohio-based Carver Financial Services, which provides financial planning for high-net-worth individuals. While more lenders have been allowing piggybacking lately, some say it may be more cost effective to get a jumbo loan, since interest rates are at historic lows.

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