100% financing – advantages and disadvantages

Have you worked hard throughout your life but never have to comb enough money to pay for a traditional mortgage? Or, do you have money but it prefers to invest instay instead of putting money for a new home? Whether you lack cash or have cash but don’t want to spend it in housing, you can get a house thanks to 100% financing. Among all open options for you, no money for financing is one of the most interesting. Fast, easy, and it’s definitely not too good to be true.

The truth of this problem is 100% financing is not without a loss. It is true.


1. You don’t need to worry about down payment.
Shop for the most competitive mortgage rates available. Then, set the lender to provide 100 financing.

This is how it works: lenders often require homeowners to make a 20% payment at the selling price of the house. Now, if your loan exceeds 80% of the house selling price, you will be asked to spend money on PMI or personal mortgage insurance. But, you can avoid paying this fee. How? Back your first mortgage with a second mortgage! Your new mortgage is called a pig loan, and it handles 20% you don’t have money. You can pay it away later using your home equity credit!

2. You save rent.
As soon as you get 100% financing on your new property, you can move there and save rent forever.

3. You can use your money in another way.
Because you get your home using someone else’s money, you can take advantage of better cash that you never spend. Invest, that, grow it.


1. You may still be asked to pay.
Varied contracts. Some may require you to pay the closing fee or request that you make payment upfront at a certain cost. To avoid this, signs with lenders offering the most competitive terms without money financing costs.

2. You will be stuck with a higher interest rate.
Even if you have good credit, you hope your interest rate is much higher. It must be expected because you all get housing under the scheme for 100% financing. This is how it works logically: because you don’t put any cash (cash that usually functions as a guarantee on a loan) in your home, you immediately classify high-risk borrowers. For this reason, you can also be burdened with a longer payment period than usual.

100% financing loans exist, and they are there because of many good reasons. However, before you take one for yourself, make sure to take the time to weigh the pros and cons to get a loan like that. Also, always read fine prints. You might think you get a good offer, just to be hit with over-the-top interest rates long ago.

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