100 ltv home equity loan is a loan that is generally a mortgage and is given with the initial loan amount that equals to the 100% of the initial property value. For instance, if the worth of a property is $200,000, then this type of loan would let the lender borrow $250,000.
These types of loans became popular in the 1990. These loans were granted to the people who have high credit scores and extremely well maintained credit history. This mortgage 100 loan to value has much higher rates of interests. The interest is almost the double of regular mortgage loans as they allow the lender to borrow a greater amount of money.
During the financial housing crisis in 2007-08, these loans played a huge in helping homeowners secure their property. Many people were owed more money on their mortgage than what their actual home was worth due to the crash of the real estate markets around the United States that led to the subprime mortgage meltdown. The values of the houses dropped majorly those made them qualify to pay a certain percentage of equity in the home. This major change in the real estate market led difficulties in securing house loans.
How 100 Mortgage Loans Work?
In the financing manner of speaking, home equity loan 100 ltv has a loan to value ratio of 100 percentage. These kinds of loans are said to be risky when compared to the standard loans as they have a loan to value ratio that is less than 100%. In the traditional mortgage loans, the size of the amount does not exceed 80% of the value of the property. In this mortgage loan, there is a greater risk involved, which is why the financial institutions charge high interest when compared to conventional loans.
Property owners and homeowners prefer seeking this type of loans as it allows them more access to the capital. The motive of the debtors is to pay off the loans that carry higher interest rates using credit cards. Traditional loans offer smaller payments and low principal balance.
How to Get 100 LTV Home Equity Loans?
For homeowners, the HELOC 100 percent loans are offered through the governments Home Affordable Refinance Program (HARP). It is surprisingly easy for some homeowners to get this loan approved and it doesn’t have to really depend only on the credit scores and ratings. If the loan is backed up by the government, they will authorize this loan provided that the loans applicants meet a certain set of guidelines. These guidelines generally state that the loan applicants must have an excellent credit score.
The Final Words:
Under the HARP, one can easily refinance their properties as long as the amount owed on the mortgage does not surpass HELOC 100 percent ltv of the current home value. This means that the homeowners can sustain a greater turn down in the worth of the home and still manage to stay within the 100% HARP limit. They can also refinance their primary mortgage as long as it stays within the limit. For more information visit on www.mortgagerefinancebadcredit.com.
