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Safety of 75% financing or less - Part 2

This is 'part two' of the financing-article that lets you know how safe 75% financing can be compared to other higher amounts of financing. (You can also read part one if you haven't already).

75% financing is mortgage-loan financing you can get that equals 75% of the price of the home you want to buy. Which means, that when get 75% financing, you're choosing to make a down payment that equals at least 25% of the price of the home you're gonna buy.

Choosing to get 75% financing for your home, or less than 75% financing for your home can be safer than getting even 85% financing for your home. Here's a couple reasons why:

It's safe to have equity in your home

Another reason for getting 75% financing - as opposed to a higher amount of financing, like 85% - is because it's safe to have equity in your home. What's equity? It's an "amount of mortgage that's paid off" on your home.

When you decide to make a down payment on your home of at least 25% when you get your financing, it's really like you're putting 25% of your home's purchase price into a "savings account."

And having that good amount of equity in your home, by getting 75% financing, can be great to have in case of financial emergencies. Sometimes stuff happens - life happens, and you'll know that have an amount of cash that's at least 25% of your home's value to draw from.

Learn more about 75% financing

It's safe for moving-time

One final reason to get 75% financing instead of a higher financing amount, is for safety at moving time.

Say you want to move, and you want to move now. If you had 100% financing for your current home - you won't have much of your mortgage-loan paid off, and that would mean you wouldn't have a down payment for the home you want to move to. Then you'd be trying to get 100% financing for a second time: and that's an awkward place to be financially.

But if you have at least 25% of your current home paid-off (by getting 75% financing), you'll know you have at least the amount of money equal to 25% of your current home's value on-hand to make a down payment on your new home.

And you never know when you'd have to move without notice: like cause you got offered a better job in Orange County California, and you currently live where real estate's cheaper - like in Chicago. It'd be a good thing to have at least 25% of your current Chicagoian home to use as a down payment on your new California home. Even if the 25% that's in your current Chicago home only equals a 5% down payment (or 1%!) on a that new O.C. home - it's still something to make an actual down payment with. It's still safer than no down payment amount at all.

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Learn more about 75% financing

Get more information on home mortgage loan financing, by contacting The Mortgage Store Online's brokers. Just use the finance contact form or call them at 1-866-880-2577.