Back to Glossary
Combination Loan
January 19, 2023
A combination loan is made up of two independent mortgage loans made to the same borrower by the same lender. One sort of combination loan funds the construction of a new home, followed by a standard mortgage once the construction is finished. Another sort of combination loan offers two loans at the same time for the purchase of an existing home. It's frequently used when a buyer can't afford a 20% down payment but wants to avoid paying for private mortgage insurance (PMI).
Related Topics
When Is the First Mortgage Payment Due?
What Does Foreclosure Mean?
What Is a HELOC Loan?
Loan Default
Financial Considerations (For First-Time Home Buyers)
Mortgage Loan Types
Payment and Debt Ratios
Home Value: Appraised, Estimated, Actual