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Just Approved in SF Gate for Brenda Wyatt!

November 23rd, 2015

Just Approved: Two ‘piggyback’ loans required for home sale

Unable to qualify for a jumbo loan, the client was referred to Brenda Wyatt by Julia Temple at Red Oak Realty, who was familiar with Wyatt’s expertise in navigating complex financing situations.

While the client had plenty of qualifying income, 20 percent down and great credit scores, she was not a big user of credit. Wyatt explained that this was the reason she had not qualified and suggested using a “piggyback” loan.

A piggyback loan describes two loans that are opened simultaneously to purchase a home, where one loan piggybacks on another. Most often this structure is used to cover a bigger percentage of the home’s purchase price.

The first mortgage is for 80 percent of the purchase price. Then a second loan is opened for a value of 10 percent of the price, and is often called a second mortgage, a home equity line of credit or a home equity loan. The borrower makes a down payment for the remaining 10 percent out of their own funds. The second number always describes the second mortgage, and the third number describes the down payment. In this case since the buyer was putting down 20 percent, the piggyback was actually 71.5/8.5/20.

In this scenario, the client was able to qualify under conforming credit qualification criteria, which are more lenient with regard to installment credit requirements. Wyatt went a step further and arranged underwriting approval for her clients prior to making an offer to provide leverage in an all-cash-offer market like the Bay Area. The clients’ offer was accepted and they closed within 21 days.

Holmgren and Associates

DBA of Finance of America
4200 Broadway
Oakland, California 94611
Phone: 510-339-2121
NMLS 0910184/1071
 

Holmgren & Associates is a branch of Finance of America. We are a full service mortgage banker with an experienced staff offering expertise in residential mortgage lending, with primary focus on loans for home purchase, refinance, and reverse mortgages.

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©2019 Holmgren & Associates is a division of Finance of America Mortgage LLC |Equal Housing Opportunity | NMLS ID #1071 (www.nmlsconsumeraccess.org)| 300 Welsh Road, Building 5, Horsham, PA 19044 | (800) 355-5698 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act
Questions, comments, concerns? Send to customerrelations@financeofamerica.com 

This is not a commitment to lend. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states.  Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision.  Any materials were not provided by HUD or FHA. It has not been approved by FHA or any Government Agency.  A preapproval is not a loan approval, rate lock, guarantee or commitment to lend. An underwriter must review and approve a complete loan application after you are preapproved in order to obtain financing.  Questions, comments, concerns? Send to customerrelations@financeofamerica.com