Jump to content

100% financing for a new home


Recommended Posts

Hello.  I have been using creditboards.com since 2005. This is the best forum for helping people  to do better  in life. I  am looking to purchase another home and I was wondering if there are companies that still offer 100% financing, for example 80/20? Thank you. 

Link to post
Share on other sites

13 hours ago, yellow25 said:

I have friends that can do HVAC. not an issue.  I had to spend money of a unexcepted funeral for a family member.  This is the reason for being alittle short on cash. Why not 100% financing?  What is the best alternative?

Putting very little or nothing down on a home is a financial risk, which is why subprime loans like FHA have dramatically higher serious delinquency rates than conventional loans.  Serious delinquency = financial hardship, ruined credit, and in many cases, the loss of the home.

 

It sounds like you have almost 85% equity in your current home, which may be a mitigating factor in what you're trying to accomplish. 

 

Are you planning to keep your current home and buy an investment property or vacation home?  Some more detail might be helpful for us to reorient the thread in the right direction.

 

pradhan_fig1_large_seriousdelinquency.jp

 

 

Edited by cv91915
Link to post
Share on other sites
48 minutes ago, yellow25 said:

I plan to keep my home and use it for a rental property and buy another home as my primary residence 

Got it, that makes more sense and helps a lot.


Similarly situated I would evaluate getting a HELOC on the current home, and use a portion of that for 5%-20% down (but I wouldn't use the entire line in case you have emergencies come up later and you're short on funds at that time).  

 

Even if you could find an 80/20, you need to have some liquidity.

 

I got some reasonably compelling offers from Zillow Mortgage Rates running some 5% down scenarios in my local ZIP code.  That might be worth a look.

 

https://www.zillow.com/mortgage-rates/#/location 

 

Of course all of this is theoretical until you apply your own numbers to see if it's feasible.  Make sure you factor in the cost of PMI/MIP if you decide to do a low-DP mortgage.  

 

I consider PMI/MIP flushing money down the toilet, but if the achievable rental numbers on your current home are attractive, it may not be material.

Edited by cv91915
Link to post
Share on other sites
On 2/27/2020 at 9:19 AM, cv91915 said:

Got it, that makes more sense and helps a lot.


Similarly situated I would evaluate getting a HELOC on the current home, and use a portion of that for 5%-20% down (but I wouldn't use the entire line in case you have emergencies come up later and you're short on funds at that time).  

 

Even if you could find an 80/20, you need to have some liquidity.

 

I got some reasonably compelling offers from Zillow Mortgage Rates running some 5% down scenarios in my local ZIP code.  That might be worth a look.

 

https://www.zillow.com/mortgage-rates/#/location 

 

Of course all of this is theoretical until you apply your own numbers to see if it's feasible.  Make sure you factor in the cost of PMI/MIP if you decide to do a low-DP mortgage.  

 

I consider PMI/MIP flushing money down the toilet, but if the achievable rental numbers on your current home are attractive, it may not be material.

 

Link to post
Share on other sites
12 hours ago, yellow25 said:

What is the best place to get a HELOC?

This will take some shopping around.   There is no one "best place" because it depends on your needs and how aggressively various places are pushing this type of product at the time you are shopping.  And if you have other types of financial products at the same place, those can bring you more discounts on the costs.

 

If you need more than $150,000 or $200,000, I would skip smaller banks and credit unions.  All of them I checked had low maximum credit lines.

 

For amounts higher than that, stick to the big banks.  While those can often be the worst places to get a 30-year mortgage, on a HELOC they will often give you a much bigger line and charge less for it.

 

I found Bank of America, Wells Fargo and Chase all to be competitive.  None of them had upfront costs, and the rates were all below prime with various discounts they bake in (example discounts [but they may vary from place to place] auto pay, relationship discounts, being in first lien position, taking an initial draw at closing, etc.).

 

In 2018 we found the best deal with Chase, and took a draw we didn't need in exchange for a better rate.  I paid off the balance the day after the money hit our checking account.

 

Edited by cv91915
Link to post
Share on other sites

Just noting our relevant financing in December:

 

We increased the line of credit on our current home from $78k to $320k, and borrowed $172k of the new line for a 15% down payment on our new home purchase (we bought in advance of the sale of our current home).  5% addition down was funded out of pocket; a conventional 3.25% 10-yr ARM, no pts, provided 80% financing.

 

All financing is through DCU (incl existing home mortgage).

Link to post
Share on other sites
  • 2 months later...

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.




  • Member Statistics

    • Total Members
      180,857
    • Most Online
      2,046

    Newest Member
    Jamesbrownbey
    Joined
×
×
  • Create New...

Important Information

Guidelines