Resources > Glossary > Combination Loan

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Common Terms 1   Common Terms 2

Combination Loan

Function: noun

Definition 1:
With a combination loan, you receive a first mortgage for 80% of the loan amount, and a second mortgage at the same time for the remainder of the balance. Down paymnents are generally 10% or less in a combination loan. If avoiding PMI (mortgage insurance) is important to you, consider combination loans. A combination loan could be used in a construction scenario. One loan would be for the construction, while another loan would follow after the construction is over. Another advantage of a combination loan is that the borrower would have one-time closing costs instead of having double the closing costs if they got two separate loans.