A 100 percent mortgage refinance is a loan program in which homeowners are able to refinance a property for its total value. Most mortgage refinance loans will only provide a certain percentage of the home’s worth, perhaps 75%-80%. If the homeowner wants to borrow more, it typically involves sky-high insurance payments.
This strategy is typically meant to protect the lender in the event that the homeowner becomes unable to pay back their refinance loan. If this happens, the lender may at some point repossess the home and sell it in order to be able to recoup its investment.
But with a mortgage refinance that offers 100 percent of the value of the home, the lender takes a greater risk, and the homeowner reaps the benefits. With a larger amount of money coming their way, they are free to do absolutely everything they’ve dreamed of doing with the proceeds from their refinance. They might use it to make an addition to their home or do a complete remodel of the property. They could consolidate a number of other loans or debts into one monthly payment with a lower interest rate. This could easily get them out of debt more quickly, allowing them to pay off their home, and their other obligations, in a fraction of the time it might otherwise require.
A 100 percent mortgage refinance is not available from all lenders. It may require some research on the part of the homeowner to find a lender willing to offer this type of refinancing plan. However, such programs are becoming increasingly prevalent as lenders realize the demand for a 100 percent refinance is on the rise. Now that consumers are aware such a loan is available through some sources, they are beginning to inquire after them from other lenders.
The process for acquiring such an advantageous refinancing loan is much like it is for any other refinance program. The homeowner must apply, disclosing personal and financial information during the process. It is likely that the lender will want to have the property appraised in order to assess its current value and get a better idea of how much they can lend while using the property as collateral.
Like other refinance loans, there are typically fees and costs associated with getting the 100 percent mortgage refinance underway. As with other loans, these fees may be folded into the refinance, or paid up front by the property owner.