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Investment Dictionary:

100% Mortgage

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.

Investopedia Says:
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.

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Real Estate Dictionary: Pledged-Asset Mortgage

A Mortgage loan, often requiring no cash Down Payment secured by a portfolio of market securities in addition to the mortgage on the home financed through the loan. Such mortgages are commonly offered by major brokerage houses and require the borrower to maintain an account with the firm. The lender can access the portfolio in the event of Default on the mortgage loan.
Example: Hot Tip Brokerage, Inc., offers a pledged-asset home mortgage that covers 100% of the value of the home. The borrower must maintain a portfolio of stocks, bonds, and mutual funds with market value of 30% or more of the amount of the loan. This account is pledged to the brokerage company against the probability of default on the loan.

 
 

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Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Real Estate Dictionary. Dictionary of Real Estate Terms. Copyright © 2004 by Barron's Educational Series, Inc. All rights reserved.  Read more

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