One of my Flagstaff mortgage originators told me on Friday that no second mortgages (as in 90-10-10) are available. They are doing PMI (private mortgage insurance) on the second 10%.  (I said, good thing Congress made PMI deductible!)

What do the Active Rain mortgage experts have to say - are there any piggybacks still available?

Some background for those not familiar with the term "piggyback" loan: Just a few years ago, lenders began marketing piggyback mortgages aggressively.  Before that, private mortgage insurance was needed for any loan on a home purchase without an 80% down payment. A piggyback loan works this way: You get two home loans -- a primary mortgage for 80 percent of the purchase price, and a higher-rate secondary mortgage (the piggyback loan) for the rest of the borrowed amount. Piggybacks appeal to homeowners because the combined monthly payments usually add up to less than the monthly payments on a single loan with mortgage insurance.

Flagstaff homes are more expensive than the national average, so we see many newcomers who have homes to sell elsewhere - even with good equity ratios in their old homes - in need of 90% financing. Since PMI is now a deductible expense, will it matter much to these people that there is not a second mortgage? Will there also be an interest rate differential?

One advantage of the 90/10/10 format was that homeowners could concentrate their savings plans on paying down that higher priced second mortgage. Will there now be a disincentive to pay down the mortgage as part of an overall savings or financial plan - at least a psychological one?

Thanks for your Flagstaff real estate referrals.