100% Mortgage

One of the biggest financial decisions that you will be making in your life is getting you and your family a home of your own.

Sure, renting an apartment or a house can serve as good as owning your own home. However, you might want to consider just how much you are losing just by putting off buying your own home for a single year.

Consider, the rent that you pay is money down the drain. You are not going to get it back ever. However, if you buy your own home and, more likely than not, you will probably be going for a mortgage, the monthly payments that you make is actually an investment in a property that, as time goes by, can only increase in value. In other words, when you are paying for your own home instead of renting, you are investing on a long term, highly valuable property.

However, it is understandable if you feel hesitant about buying your own home. After all, property prices are high nowadays and any property that is worth buying will probably be expensive. Well, the good news is, nowadays, even expensive properties may just be within your reach if you use a 100% mortgage.

Typically, the mortgage values that you can get are never the exact value of the home that you are planning to buy. Usually, you can only get mortgage loans at around 75% to 90% of the actual value of the property you are buying. Since you cannot pay off your property with your mortgage loan, then this usually means that you will have to make a cold cash down payment for the property. Given the value of a good property, this means that you will still need to realize a sizable amount in order to own the home that you want.

100% Mortgage Covers All Costs

With a 100% mortgage loan, you don't have to worry about the down payment for the property you are planning to acquire. The 100% mortgage loan that you are getting will take care of the entire buying cost for you. Thus, all you will need to be worrying about is paying off the loan's monthly dues. A 100% mortgage loan can also free up some money for you to use to set up your move to your new home. As you can imagine, you will need some extra money floating around to take care of moving house, paying off house insurances and basically adjusting to your new home.

Pitfalls With 100% Mortgages

A 100% mortgage may seem like a dream come true. However, a 100% mortgage has its own pitfalls that you need to be aware of. A 100% mortgage will often carry a higher interest rate compared to a regularly rated mortgage loan. Also, as a precaution to the lender, these types of loans will usually have a tie-in clause so that you cannot change lenders. Some lenders may also burden you with a mortgage indemnity guarantee policy.

This policy is actually an kind of insurance for the lender in the case when you cannot meet your payments. This is not the rule for lenders, however and quite a few of them actually do not include this. The key is, therefore to shop around as much as you can for the 100% mortgage loan that is right for you.

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