100% Investment - Can I still get 100% investment loans? The answer is yes. Although many lenders are getting rid of the programs, we as mortgage brokers have access to hundreds of lenders, so we keep all the best programs. Contact us now to inquire. [apply]
You can expect higher than normal interest rates on loans for 100% financing on investment properties. Even with the best credit, the bank is taking on additional risk because they are financing all the value of the home, and if times get rough most people will skip the payment on a second or investment home rather than miss a payment on their primary residence.
100% financing on investment properties can be done up to 4 units. However it is in most cases easier to finance a 2 unit with 100% financing. The rates are generally slightly lower on the 2 family as well.
Purchasing investment property can be a great investment and if done properly can make you quite a bit of money. This is why it is very important to find an honest, educated and hardworking mortgage broker to become familiar with you and your situation and handle all of your home financing needs. There are many people out there who are not even aware that 100% financing on a rental property is available. By choosing the right mortgage program for your rental property(ies) you will be able to maximize monthly cash flow and invest into your future as well. Consult your trusted mortgage broker now to see what you can qualify for.
The 100% CD Home Loan - The 100% Home Loan (CD Loan) allows borrowers to receive 100% financing when sponsors (up to 3) pledge a CD (certificate of deposit savings account) equal to 20% of the home value. A 90% net loan to value is also available with mortgage insurance and a 10% CD pledge. The CD will accrue interest on the savings along with receive 100% financing with either a fixed rate mortgage or a low minimum rate Pick-A-Payment Option ARM loan.
Some benefits of the benefits you will receive from financing your mortgage with a 100% CD Home Loan;
No need to wait to save for a down payment
Variety of Options
Income for your sponsor at a "market rate"
The features of the 100% CD Home Loan;
Availability for purchase or cash out refinancing
Sponsors earn interest on CD
Leveraging with benefits
The benefit for a borrower will come in retaining an asset in the form of a CD and earn interest on the CD rather than dumping a bunch of money into equity. The borrower can select any term CD from a 3-month CD to a 5-year CD. The CD must remain open for a minimum of two years so it will continue to roll over and pay out interest. When the equity position reaches 80% and if the CD has been open for two years, the CD is released.
A parent could open a CD and allow it to be collateralized for their child who is buying their first home or a borrower can self sponsor the CD.
It is important to know that the CD can be sponsored by anyone, and also by multiple people. If the CD is self sponsored, you can even do the loan as stated.
Will 100% financing mortgages always be offered? - One hundred per cent financing or no money down purchase programs have been commonplace in the mortgage market for the past several years. A word of caution to potential homebuyers though, as the housing markets in many areas start to see diminishing home values, many investors will back away from 100% financing. Dont make the mistake of thinking that just because such programs are available now that they will always be there.
While 100% financing options may not disappear altogether, there is already movement by some lenders to tighten up the criteria for granting these types of loans. In the future, to qualify for these programs, you may need higher credit scores and/or the ability to fully document your income and assets.
Will 100% Financing Disappear? - A lot has been written lately about 100% financing and how people might be in trouble with those loans. The truth is that while some people may become over extended using 100% financing, there are still situations where 100% financing can be a good loan. But there are things the borrower needs to be aware of.