What is a piggyback 80/10/10 loan, and how does it help me avoid PMI?

An 80/10/10 loan splits your financing into a first mortgage for 80% of the price, a second mortgage or HELOC for 10%, and a 10% down payment from you. Because the first mortgage stays at 80% of value, you avoid private mortgage insurance, which normally kicks in below 20% down. This can be cheaper than paying PMI, and it also keeps a jumbo-sized purchase within the conforming limit on the first loan. The trade-off is that the second loan usually carries a higher, sometimes variable, rate that you must pay down. Compare the combined cost of both payments against a single loan with PMI over your expected time in the home before choosing this structure.