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MARKETWATCH: No - Money - Down Mortgages Are Back..

MARKETWATCH: No - Money - Down Mortgages Are Back..

By AnnaMaria Andriotis
Feb. 1, 2013, 12:20 p.m. EST

Some affluent buyers are getting the keys to their new home without putting a penny down.

It’s 100% financing—the same strategy that pushed many homeowners into foreclosure during the housing bust. Banks say these loans are safer: They’re almost exclusively being offered to clients with sizable assets, and they often require two forms of collateral—the house and a portion of the client’s investment portfolio in lieu of a traditional cash down payment.

In most cases, borrowers end up with one loan and one monthly payment. Depending on the lender and the borrower, roughly 60% to 80% of the loan can be pegged to the home’s value while the remaining 20% to 40% can be secured by investments. On a $2 million primary residence, for instance, the borrower could get a $2 million loan, which would require a pledge of assets in an investment portfolio to cover what could have been, say, a $500,000 down payment. The pledged assets can remain fully invested, earning returns as normal, without disrupting the client’s investment goals.

Read more: http://www.marketwatch.com/story/no-money-down-home-loans-ar...




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Michael Nystrom's picture

Woot!

Happy days are here again!

Dow 30,000, here we come!

Where do I sign up?

All art is only done by the individual. The individual is all you ever have, and all schools only serve to classify their members as failures. E.H.