- A mortgage loan in which the borrower receives a loan amount equivalent to the total value of the property to be purchased. In this situation, the borrower does not need to make a down payment to secure the loan.
A 100% mortgage gives an individual with little or no cash the opportunity to purchase a house or a similar property. The loan is usually backed up by securities, such as stocks and bonds, currently owned by the borrower. Two significant drawbacks to the 100% mortgage are higher interest rates and the possibility that the borrower's securities will be liquidated to cover a collateral call.
Investment dictionary. Academic. 2012.
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