What exactly is 100% financing when purchasing a house?

Answer 1

It is financing the full purchase price of the property. To save money, this is usually accomplished via a so-called 80/20 piggyback, rather than a single loan for 100% of the value.

You can still expect to pay for loan fees, half of escrow, and a few miscellaneous costs, unless you can get your seller to pay them as part of the contract (many are right now).

I would have thumbs upped that trainee loan officer's answer and passed this question by, except that there is no such thing as a 1% loan. There are loans where you make the payments for a short period *AS IF* the rate were 1%, but the real rates are at least a full percent over the rates for thirty year fixed rate loans right now. This piles extra money into what you owe every month, and you're going to have to pay it sometime. Here are some articles worth reading on this type of loan:

http://www.searchlightcrusade.net/posts/1126189276.shtml

http://www.searchlightcrusade.net/posts/1154808089.shtml

http://www.searchlightcrusade.net/posts/1155049674.shtml

http://www.searchlightcrusade.net/posts/1150813093.shtml

http://www.searchlightcrusade.net/posts/1151101964.shtml

Outside of very narrow circumstances, a loan officer who suggests one of these loans is not your friend. In fact, I'd rather have an honest enemy.

Answer 2

100% financing means you borrow 100% of the purchase price of the home. Rather than borrow 90% then come up with a 10% down payment. Your interest rate will be a little better on 90% loan since the lender incurs less risk. VERY important, ask the lender what your closing costs are. You will have to pay for an appraisal, survey, application fee and possibly inspections. You may ask the seller to pay for these in many cases.

Answer 3

100% financing means the loan is for the total amount of the price of the house; it does not matter if you put a down payment or not. If this is your first time buying a house and don't want to pay more for loan insurance, you would need to get two mortgages; the 1st should be 80%, and the second is 20%. The rule for first time home buyers who don't want to pay for the loan insurance is that the financing should be 80% or below. The interest rate could go as low as 1% depending on your fico score.

Answer 4

100% financing is buying a house with no down payment. You still may have to pay closing costs on top of that, though. Roughly estimate around 3%, but it varies in different parts of the country.

You'll probably need to go through a mortgage broker (not a bank!) to get this type of loan. They deal with this type of loan all the time, and a lot of banks don't offer it.

Answer 5

100% financing is just that. If you want to purchase a home listed for $200,000-that would be your loan amount. You do need to cover closing costs-about 2-3% of the loan--E-mail me for a free pre-qual ( to see what you can afford of the 100%)

Answer 6

100% financing is if you pay for the house entirely on a loan - with 0% down payment.

Additional info: This would have to be structured correctly to let you avoid paying mortgage insurance, and would probably be at a relatively high interest rate.

Answer 7

You put no money down. In some cases you do not even pay a closing cost.

Answer 8

put it this way, u have to very look, or pretty!