What is 100% Financing for a Home? (When it Makes Sense)
By HiLine Hal
Historically, many people are told to put at least 20% down to finance a home. But, if you have the right circumstances, there are better options. Securing 100% financing means you will acquire a home without the necessity of putting money down toward your mortgage. 100% financing can open up your possibilities of obtaining the home of your dreams. While that is exciting, it is wise to be informed about the lending package you are entering.
What is 100% Financing?
Let’s unpack what 100% financing means and how you can use it for building your home.
Traditionally, when you apply for a mortgage or construction loan, you would be required to put a down payment of 20% or more toward your mortgage. However, lenders who have 100% financing packages will not require money down towards the mortgage. Of course, this is based on the lender’s package, and there may be other out-of-pocket costs or fees, so it is always wise to review the entire package.
HiLine Homes has located lenders who have competitive construction loans & mortgage packages. Many of our approved lenders offer unique 100% financing packages structured to allow our homeowners to participate during the home building process. Our knowledgeable Home Consultants are your resource to help direct you to a lender that will benefit your circumstances.
What is a Construction Loan?
Broadly speaking, a construction loan is a short-term loan that allocates funds to pay for materials and contractors to build your home. This loan will roll the cost and preparation of the land, permits, and other items needed to build a complete house into one construction loan. Typically these loans only last a year or less and end once the certificate of occupancy is issued.
How Does a Construction Loan Turn into a Mortgage?
Once you have your certificate of occupancy, you will start to move into your beautiful new home. At this point, your construction loan will begin the process of converting to a permanent mortgage. This process is dependent on if you signed up for a 1-step or 2-step construction loan and the specific lender package. Either way, your home will be inspected & appraised to determine the value.
HiLine Homes Approved Lenders know our products and reputation, which allows the process to be streamlined. Usually, the lenders who offer 100% financing packages take the final appraised value of your home and use your equity as your down payment.
Can I Qualify for a First Time Home Buyer Loan with Zero Down Payment?
Yes, HiLine Homes has assisted many first-time homebuyers in acquiring a home tailored to their lifestyle and securing 100% financing. Moving into your very own home is a thrilling experience. The goal to own your home may take years, especially if you are trying to save a down payment of 20% or more. Knowing there are lending packages available that can qualify you for a mortgage with little to no money down makes owning your home more attainable. HiLine Homes has helped thousands of families connect with a lender to fit their circumstances and build the home of their dreams. Contact a Home Consultant to find out more details based on your region.
When Does 100% Financing Makes Sense?
By securing a 100% financing package, the funds you’d normally put towards a down payment will stay in your savings account. This establishes a secure financial position that your lender can use to your advantage while qualifying you for your final mortgage. When you are ready to complete your final mortgage, discuss with your lender the possibility of rolling in higher interest loans, such as a car or college loan, to maximize your financing and saving potential.
1. Taking Advantage of Low-Interest Rates
Whether you have the circumstances to take advantage of a 100% financing package or another competitive loan package, the interest rates are a great reason to move forward on acquiring the home of your dreams. The low-interest-rate environment allows home buyers to get more home for their money. Further, when you choose to build with HiLine Homes in the Pacific Northwest, you receive exclusive financing from our Approved Lenders.
2. When You Own Your Land
You are in an enhanced equity position to receive 100% financing when you own your land. Perhaps, you have owned the property for many years, which results in established equity. Thereby you are able to use this situation to your advantage and secure 100% financing. Additionally, by working with an “on your lot” builder like HiLine Homes, you can build more affordably because of our construction process.
3. When You Buy New
Many people prefer to own a home that is either new or just a few years old. It results in a more energy-efficient home with modern features and less maintenance. Every HiLine Home is built with multi-point quality control throughout the construction process and backed by our exclusive limited 10-year warranty.
The HiLine Homes Experience
For over 25 years, HiLine Homes has helped thousands of homeowners get a quality-built home at an affordable price. Our successful “on your lot” building program assists families in attaining the dream of homeownership while building potential equity in their new home. Each step of the way, you will have a HiLine Homes representative to guide you, no matter if you own your land or are searching for the perfect lot.
Securing financing can be one of the most stressful parts of building a new home, and we are ready to help. Together with our Home Consultants, our Approved Lenders can help you find the best financing solutions to find the right land for building or get into your perfect home on your existing property.
Don’t know where to start? No worries. Whether you are looking for a traditional home building program or a Shell Program, we have developed our building process to support you. Connect with a Home Consultant in your area to schedule a home building consultation to learn how to build the home of your dreams.