A piggyback mortgage is when a home buyer takes out two mortgages to purchase a property instead of one.
Here's how it works:
1. The first mortgage covers a percentage of the home's purchase price, usually around 80% of the total amount.
2. The second mortgage, known as a piggyback loan, covers the remaining amount, typically 10% to 15%.
3. This setup allows the buyer to avoid paying private mortgage insurance (PMI) that is usually required when the down payment is less than 20%.
So, the correct answer to the question is: B. Two mortgages on the same house.
