3 Advantages of 100% Financing

You want to own a house and you’re exploring all possible options. The old school approach to home ownership is that you pay 20 percent right off. But is putting down this much cash the best option for someone as cash-strapped as you? Do you even have that much money to put down? And, even if you do, should you?

This is where 100% financing enters the picture. A lot of lenders are now offering no-down payment deals to people who have good credit but very little cash. Here are the main advantages of such an arrangement.

1. You don’t need to make down payment.
Yes, you don’t. All you have to do is find the best mortgage rate and then arrange for a lender to give you 100% financing!

Here’s how you do it. Lenders usually ask for a down payment of 20 percent of the house’s purchase price. If your loan is more than 80 percent of your house’s purchase price, you will need to pay Private Mortgage Insurance or PMI. How do you avoid paying this? Simple! You get a second mortgage to back that first mortgage you made! This mortgage - called the piggyback loan - takes care of the remaining 20 percent. You won’t have to worry about paying this off right off either - you can obtain it using your home equity credit!

2. You can save on rent.
“But I’m not paying much for rent!” you might reason. If that is the case, good for you. You’re not socking away too much money on property you won’t ever own. Even so, keep in mind that rent is still rent. No matter how low it is, it will add up eventually — and you’re still not getting anything in return!

Why not save on rent by living in your own home? You can move into your property - and save on rent forever - using 100% financing.

3. You won’t be using your own money to buy your own house.
The secret to wealth is not by spending your own money to make money but by using other people’s money. Donald Trump, for one, got to where he was thanks to his ability to find financing from other people! Why not use the same principle to buy your own house? Look for the most favorable mortgage rate, and then hammer down a good deal with a lender. And, as far as terms are concerned, you would be hard-pressed to find anything better than 100% financing!

From a purely logical viewpoint, buying property under 100% financing is a good way to minimize financial risks. You can shift practically all the risks to your lender. In return, you only have to make sure your property holds its present value. Either that, or increase in value as the years go by.

Why does it make more sense to buy a home under such a scheme than to continue renting? Think about this: as home prices increase, so do rental fees. Do the math and you will find that buying a house now will cost you less in the long run than if you continue to rent living space for the rest of your life!

Why not own your own home under a scheme for 100% financing? Go over the mortgage rate Toronto lenders are offering. You won’t have any trouble whatsoever finding the best mortgage rate Maple residents can enjoy!