It'sa totally different scenario if, despite having a good job with a high income and brilliant prospects, you still don't have the stability to satisfy your mortgage lender that you are ready to take on the responsibility for a mortgage. This not unusual situation may have come about because you have had to shoulder the burden of student loans for a significant period or because you have fulfilled your dream of travelling the world. Because of financial commitments or travelling you haven't managed to save enough money for a deposit, and so it may be difficult to get all that all-important credit that you need now to buy the house of your dreams.
Luckily times have changed since fifteen years ago when 100% financing would simply have been unavailable to you. Now however it is a different story, so read on!
The scheme you require is called an 80-20 loan or 'piggy-backed' second. This means a first mortgage for 80% of the total amount and a second one for the rest. Of course as can be expected you will have to pay very high interest rates but these can be offset if you can afford to pay a deposit of at least 3%. Fortunately Fanny Mae has agreed to buy these loans and has standardized the lending criteria for 97% finance. This means that this type of finance is available from nearly every mortgage lender, but nevertheless the best option may be a mortgage broker who for a small fee, contacts the lender on your behalf.
Don't forget however that you need to set aside funds for things like mortgage insurance and closing costs for the transaction, which can be very high. This is because many piggyback loans charge a large balloon payment as an end of loan payment and this is considerably higher than the usual mortgage payment so you will certainly need to plan in advance for this. To help you work out the math for your particular situation you might find an on-line calculator useful and you will certainly need to talk with your mortgage professional. Another factor to consider is that you are in effect taking out a dual mortgage so might have difficulty obtaining a third mortgage or home equity if the need were to arise.
However if you continue to enjoy a high income all should be well! The important thing is to start saving now.
Gus Taperman holds a Bachelor's degree in Commerce and completed his master's in Business Administration . He is working as writer and financial consultant to find a Personal loans, Debt consolidation, home equity loans at cheap rates visit www.taperman.com