Qualifying For 100% Financing

What is the use of getting only 80% of your financing needs? The best way to maximize a loan is to get 100% financing.

Understanding 100% Financing

A zero down payment on a mortgage constitutes the popular 100% financing. Borrowers who have a hard time putting up a down payment for a mortgage find this finance scheme convenient to finance the purchase of a home because they can finance enough to qualify for tax deductions. The financing format can be applied for the first mortgage and the combined first and second mortgage; borrowing has never been this appealing for borrowers who are short on cash.

In exchange for this treat, lenders require that the property must be occupied by the owner who must have a passable credit rating. Interest rates are higher but this is a minimal concern for low income borrowers who want to purchase a home but are deterred by the huge amount needed for a down payment. As mortgages go, the 100% financing will follow the variable rate or the fixed rate depending on your preference.

You can take out two loans for an 80%-20% mortgage so you can put up the 20% down payment required by the mortgage company. Doing so eliminates the mandatory mortgage insurance that goes with a mortgage, which adds up to the overall cost of the property.

More Advantages of Zero Down Payment Financing

If you have been trying to save for a down-payment for a house and there’s a house you want to buy at the moment, your savings may not be enough for the required deposit of 20% of the entire selling price. The house might go to somebody else and you don’t want that.

The 100% financing saves the day by providing you two separate loans and there is no more need to dip into your savings to come up with the deposit. You can use your savings for other urgent payments such as credit card debts.

If you already have a house or partly own one, you can cash on the equity of the property – the full amount equivalent or thereabouts to the investments you have plunked into your home. This gives you extra for your credit card loans because your home equity has become a huge line for credit.

Get the Best Deal

There are several lenders out there – private owned and government owned. Whatever your option you still have observe the proper way to choose your lender. The financing is not one year loan it is a long-term loan. If you have to pay the loan for 20 years you have all the reasons to be picky when selecting a lender for 100% financing.

The best deal for 100% financing provides you with the lowest competitive interest rate, a clear grounding on the mortgage policies, and transparency of fees and other information that can impact on your mortgage. Instead of jumping at the first offer, check out other lenders who can give you a realistic plan according to your budget. When it comes to mortgages, it’s how much you can afford to pay, not how much you want to borrow.

Financing – An Essential to Your Real Estate Investment Business

Finance is defined as dealing with the capital investment and management of money and assets. Real estate financing in particular is concerned with investing money in real estate and plays a pivotal role in it. The real estate financing can be defined in three categories which are:


The most important step is allocation. Most of the people do not have so much cash to invest in the real estate and therefore have to secure finance for real estate. This is an important step as generation and utilization will generally follow once you allocate the right amount of money.

Securing finance can be tough especially for those who have started with the real estate. Various factors must be kept in mind in order to be able to secure the finances. These factors are as follows:

The most important aspect that the lender will look at is the credit worth and history. This is done as an assurance that you are capable of repaying the loan. The lender will look into different aspects governing your credit worth. This includes your income, assets, debts and other things. Only after close examination will he give you a loan. It is very important to select the right lender according to your credit worth. Whichever lender you select, make sure that you meet their loan criteria.
Another factor that will help you in securing finance is your property type and location. The lender will study the potential benefits of the property in a particular location. Securing finance for a property which has its location that has a greater market value, the lender is more likely to give you the finance. The size and the area of the property are also considered. A property that has a potential use will secure finances more easily.
Cash flow is an essential aspect that the lender will look into. You have to assure them that you have the best offering and that your property will generate a large amount of cash. Greater the profit a property is likely to generate more is the chances that you will be able to secure finance for it.
Also you have to give assurance to the lender that you will pay all the taxes and mortgages. The lender needs it because if there are chances of your property going default the lender will be at loss. So assurance that investing in your chosen property is not risky will enable you to get the loan. The lenders will check all the risk factors and if find any potential risk, they may not give you the loan.
If you are securing finance for commercial real estate the lender will also look for the business you are investing in. The more money making and the less risky it is, easier it would be to secure the loan.
If you already had been in the real estate for some time, the lender will also look into the other property you own and your means for financing those.

In the end, it all depends on which lender you choose to finance your property. Always try to choose a financer that is compatible with you i.e. understands you needs. In this way you can avoid many future problems. No matter who you choose your lender, almost all lenders ask for documented proof of your financial position. They can even ask for the business plan for the commercial property. So before you go ahead with securing finance, ascertain that you are equipped with all the necessary documents and proofs.

All About Seller Financing

Imagine you are just about to buy a real estate property but find yourself in the difficult situation of falling short of the required funds. You are so close but yet so far. Don’t loose heart, seller financing can come to your rescue. Under the seller financing arrangement, the seller of the property provides a loan to the buyer in order to enable him close the sale transaction. The amount of loan provided by the seller would depend upon the need of the buyer. The other names of seller financing include owner financing or purchase-money mortgage. The loan provided by the seller could be as much as the buyer needs but under the normal situations it supplements the home loan availed by the buyer. The aim of seller financing is simple, enable an early closure of the deal so that both the buyer and seller can reap the benefits. In return for the benefits related to seller financing, the buyer and seller are exposed to a few risks related to this financial arrangement. Let us first look at the benefits of an owner financing deal enjoyed by the buyer:

o Enables the buyer and the seller to keep the closing costs under check.
o The buyer has a recourse to a convenient and hassle free method of financing to conclude the deal.
o The buyer of the property may avoid spending on PMI insurance premiums.
o The buyer may seek additional loan from the seller towards furniture, fixtures and accessories contained in the house at the time of purchase. At the same time, seller may also be more than willing to this arrangement.

On the other hand, the advantages enjoyed by the seller include:

o The interest rate charged by the seller on the loan made available to the buyer is at a premium to conventional loans
o The seller usually ends up receiving a premium over the market price of his property.
o The seller does not have to undertake the exercise of home improvement or repairs for the property that he intends to sell.

As far as the shortcomings are concerned, these are as under:

o The seller may not disclose the other encumbrance charged against the property. In such a scenario, the buyer of the property would not have a clear title to the property even after repaying the loan to the seller.
o Higher Foreclosure risk is attached to properties financed by way of seller financing transaction because of higher interest cost and incomplete credit appraisal by the buyer.
o Under a seller financing option, it is very usual for the buyer to be paying a higher price for the property compared to the market price because the buyer usually does not engage the services of a home inspection agency to assess the fair value of the property.

A Seller financing transaction can be a win-win situation for both the buyer as well as the seller but like all financial transactions, both the parties have to do their due diligence before signing on the dotted line.