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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127684  
Subject: 100% Financing Where Previously Unavailable Date: 9/4/2001 9:58 PM
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Hi Gang,

FWIW, I just checked out a suspected 100% strategy and had it confirmed as executable with at least 2 different lender's underwriters...

Currently there are a few 2nds lenders who, on a purchase, will allow only 90% to 95% CLTV (total loan value... (thus avoiding PMI) like 80-10 or 80-15, or 75-20... you get the idea) due to certain circumstances such as;

1) Credit considerations,
2) residence status (non-perm alien visa workers,)
3) income ratios
and other possibilities,

In such cases, SOME of these 2nds lenders have no prepayment penalties on their 2nds terms.

When this is the case, the day AFTER closing the 2nd mortgage can be refinanced (usually at no cost at all) into a stand-alone HELOC (Home Equity Line of Credit) to 100% CLTV, thus re-capturing the down payment surrendered for the purchase.

In some cases this may be do-able on non-owner-occupied homes as well!

The key is that the 2nd be a "stand-alone" Line of Credit... thus no concurrently-closing 1st loan... which is why the timing of the 1-2 punch is important.

This is a BIG plus for my nnon-permanent resident H1B and L1B visa clients, and Canadian NAFTA clients as they currently aren't allowed 100% purchase financing (with or WITHOUT PMI) regardless of HOW good their financials are.

Check with your loan officers..

Cheers,
Dave Donhoff
Foolish Mortgage Broker
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