The 100 Percent Mortgage

by Karen McFarland on March 28, 2012

When an individual wants to apply for a 100 percent refinance, he is intending to get full cash value for his home. Since there is no down payment required in this particular loan type, one can use such a loan in any way he or she would fancy. One can pay off bills, launch home improvements or even use the funds to get away from it all.

When an individual refinances the full value of your home, they are essentially taking out all of the value of the property. The costs can be onerous. One will have to pay a fee to cover closing costs, and this would generally be no more than three percent of the home’s entire value. Also because one is using up all of the equity in your home, they will, in most cases, have to purchase private mortgage insurance. Refinancing is not without its fair share of tax benefits. Individuals will be able to deduct interest and closing costs. To find the very best rates, one will need to do some research. There are plenty of online mortgage websites that will pit lenders against each other to refinance your home. One can compare different rates and different offers and make a concrete analysis. The analysis of one’s loan options can be facilitated if further research is done on other factors, such as one’s credit score, their existing debt, their gross and net income and liquid assets and of course, the value of their home. This will enable them to receive a realistic quote and give them some idea regarding their options.

When looking to refinance the full value of ones’ home, one may have to be creative with financing. An individual would have more options than a simple straight-up 100 percent refinance, which include, but not are limited to the option of refinancing two separate loans. This allows individuals to forgo private mortgage insurance (PMI), which will cost hundreds of dollars a year. The possibility of setting up bespoke terms for each of the loans is also an advantage of a separate refinance loan. E.g. – One can borrow one loan at a fixed rate, while he can take out another loan at an adjustable rate. Hypothetically speaking, there are many options to choose from. One is only limited by their imagination, credit score and the condition of the property.

Today’s complex society would behoove many individuals to have a large amount of cash at their disposal in expedient time, and this can be achieved by refinancing their home and cashing out the full value. There are many reasons that an individual may consider doing this. The average reader would want to pay for their oldests college matriculation, invest in some property or purchase some more, settle debts, do home improvement or finance their own adult education. However, this is not a decision which one would want to make overnight, because after all, in a 100 percent refinance, one could stand to lose his or her home if they are not able to expeditiously pay back the loan.

This is a matter of great pecuniary importance, so it is imperative that one consider the consequences, as well as the additional costs to be incurred thereafter, such as private mortgage insurance and increased monthly payments.

The secret to fast weight loss is easier than you think!

Leave a Comment

Previous post:

Next post: