100% Financing. Will It Ever Return?

Dated: November 3 2020

Views: 151

I was a mortgage lender for 10 years, lastly with Wintrust, before I became a Realty now also for 10 years.  Primarily because of the market I serve, I kinda miss the days of 100% financing.  Many would say these types of lending programs are responsible for the real estate crash of 2008.  I would agree, but I would also add that is because these financing options were not positioned correctly.  The 100% loans were mostly short term loans where the interest rate would automatically increase year after year until the rate then around 7-8% would cap out at sometimes 15% or more.  Eventually the borrower would not be able to afford the payment, which would eventually lead to forecloser.   

The solution was simple however.  What ever reason the borrower needed to do a short term loan, they would need to correct in order to qualify for a 30 year fixed mortgage with the lower rate.  Lord only knows how many people would have remained in their homes had they only been advised properly.  But that whole 100% financing is all in the past now right, or is it? 

As the host of the largest housing expo in midwest - ChicagoHousingExpo.com, I am always meeting new lenders.  Earlier this year I found one that was offering 5% down payment assitance with no income limits at a 3.75% interest rate.  I would have the seller pay the closing costs and wow, I have closing settlement statments where my clients put down $1,000 earnest money and got that $1,000 back at their closing. That equates to no money down! I would say 100% financing is back and better than ever.  I don't know how long this program will last but I will love it for as long as it does.  

Warren is a real estate broker with eXp realty in Chicago. He lives in South Shore with his wife and business partner LaShawn, an exp realtor and die hard advocate for anything related in housing and real estate.  Warren can be reached 773-426-2896 or warren.davis@exprealty.com

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Warren & LaShawn Davis

Warren & LaShawn are committed to serving all who might need our services. But we are rightfully sensitive to the Black Ownership Matters movement and are well suited to help with much needed real cr....

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100% Financing. Will It Ever Return?

I was a mortgage lender for 10 years, lastly with Wintrust, before I became a Realty now also for 10 years.  Primarily because of the market I serve, I kinda miss the days of 100%.

Read More