Credit Union of Colorado has unveiled a mortgage loan program to help people become first-time home buyers -- with no cash outlay.
The credit union’s “100% Mortgage Package” provides 100% financing for a buyer’s first house by utilizing an interest free second mortgage as the borrower’s standard three percent down payment.
Here is how it works:
The 100% Mortgage Package combines a 97 percent fixed-rate 30-year first mortgage loan with an interest-free second mortgage equaling up to three percent of the total loan to use as a down payment on a house priced at no more than $467,100. These two loans work together to achieve 100% financing of the home.
Mortgagees make no payments on the second mortgage until they pay off their mortgage, refinance or sell their home. Closing costs for the second mortgage are paid by the credit union.
More information is available online at CUofCO.org.
The credit union’s senior vice president of marketing, Doug Schneider, said he is unaware of any other mortgage loan programs in Colorado that utilize a zero-interest second mortgage to achieve 100 percent mortgage financing.
“We developed this package to help people buy their first house before prices escalate any further.” He said millennials represent the largest potential demographic market for the package.