Purchase Money 2nd

Piggyback Loans (Purchase Money 2nds) in Frisco and North Dallas

A piggyback loan is a secondary mortgage taken out at the same time as your primary mortgage to increase your down payment and avoid Private Mortgage Insurance (PMI). By using an "80/10/10" structure—where the first mortgage covers 80% of the home's value and the second mortgage covers 10%—homeowners can keep their primary loan within 2026 conforming limits while putting only 10% down.

Why Choose a Piggyback Loan in 2026?

With Frisco's average home price now exceeding $930,000, many buyers find themselves caught between a large down payment and high-priced Jumbo loans.

• Avoid Monthly PMI: Eliminate the average $290/month cost of mortgage insurance without needing a full 20% cash down payment.
• Beat the Jumbo Limit: For 2026, the conforming loan limit has increased to $832,750. A piggyback loan allows you to buy a $1M+ home while keeping your primary mortgage under that limit, often securing you a much lower interest rate than a single Jumbo loan.
• No Escrow Required: Unlike many traditional loans, piggyback structures often allow you to manage your own property taxes and insurance rather than paying into a monthly bank escrow account.
• No Prepayment Penalty: At First Lonestar Bank, our piggyback loans give you the flexibility to pay down the second mortgage as your income grows without any fees or penalties.

The First Lonestar "80/10/10" Advantage

As a local community bank, we bend over backward to help Texas families navigate these complex structures. While big national lenders may push you into a single high-interest Jumbo loan, we look for the solution that keeps your monthly payments as low as possible by leveraging the power of two loans.

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Piggyback Loan Frequently Asked Questions (FAQs)

What is the difference between an '80/10/10' and an '80/15/5'?

It depends on your down payment. In an '80/10/10,' you put 10% down and borrow 10% in a 2nd mortgage. In an '80/15/5', you put only 5% down and borrow 15%. Both options are designed to keep your primary 1st mortgage at exactly 80% to eliminate PMI.

Is the interest on the second mortgage tax-deductible?

Generally, interest on a second mortgage used to buy or substantially improve a home may be tax-deductible. Because tax laws change and individual situations vary, we always recommend consulting with a tax professional regarding your North Dallas property.

Can I use a piggyback loan for a new construction home in Frisco?

Yes! Piggyback loans are a favorite tool for custom builds in high-value areas, especially when the final price exceeds the $832,750 conforming threshold.

The Fine Print

This is not a commitment to lend; you must submit additional information for review and approval. Rates, Annual Percentage Rates (APRs), and terms are subject to change without notice. Certain restrictions apply to all programs. See your FLB Mortgage Loan Officer for complete program guidelines, loan application, applicable fees and annual percentage rates (APRs) for all loan programs. Full underwritten approval is required, and all loan approvals are subject to credit, income, and asset reviews and approvals. Bank NMLS#1215182