No cash to spare to buy a home? No problem — if you have an investment portfolio. See how some affluent buyers are getting 100% financing, and why banks say these loans are safer than the ones that led to foreclosures during the bust. Yes! No-Money-Down Mortgages are back! But Is the ability of people to borrow without a down payment a strength of the US mortgage system, or a weakness?
According to Peter Ferrara, managing director of the private bank's residential real estate “Demand is two to three times what it normally is” . Some banks are using this product to lure in clients, such as BOK Financial's offer, which is available to new physicians. To provide the loan, the bank must first receive proof that the borrower has cash or investments, like stocks or mutual funds, that equal 10% of the borrowed amount. (The company says it doesn't seek a pledge of those assets but just wants to know that borrowers can meet their obligations over time.)
What are the things you need to know before indulging into this enticing program?
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