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Call 1.800.854.7154 or contact your Merrill Lynch Financial Advisor
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MERRILL LYNCH HOME LOANS™ |
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When combined with one of Merrill Lynch’s home financing solutions, these down payment options can help you avoid disrupting your investment strategies by allowing you to purchase a home – for yourself or to sponsor a relative -- with no cash down payment. You may even be able to finance up to 100% of your home's value. |
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Mortgage 100®
This program allows you to pledge eligible securities in a Merrill Lynch pledge account instead of liquidating assets to make a cash down payment. Since your cash will not be used for a down payment and you do not have to liquidate securities, this strategy may enable you to:
- Minimize upfront mortgage expenses
- Keep your overall investment approach on track
- Increase your potential tax deductions1
Minimize up-front mortgage expenses.
- You can reduce or even eliminate your down payment with no Private Mortgage Insurance (PMI).
- The program is available with “0” points closing option to reduce your total out-of-pocket mortgage closing costs.
- There are no additional fees or higher rates to use 100% financing.
Keep your investment strategy on track.
- Remain fully invested by holding eligible assets in a Merrill Lynch pledge account, and continue to buy, sell or trade in that pledge account.
- Continue to earn dividends, interest and capital appreciation.
- This means that you can potentially enhance your net worth.
Enjoy potential tax benefits.
- Avoid capital gains taxes that would normally be incurred from liquidating securities for a cash down payment. (Please consult your tax advisor.)
- Potentially increase the amount of your tax deductible mortgage.
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Parent Power®
This program lets you help family members purchase a home by leveraging your assets—in a way that does not disrupt your overall investment strategy. With Parent Power®, you can help a family member finance up to 100% of a primary residence by pledging eligible securities. It has all of the features and benefits of Mortgage 100, but in addition, the sponsor does not have to co-sign the loan and incurs no gift tax (please consult your tax advisor).
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How one couple used Mortgage 100 to maintain $100,000 that would have traditionally been used for a cash down payment:
Michelle and Robert wanted to purchase a $500,000 home. They were considering liquidating $100,000 (20% of the purchase price) of their portfolio to fund their down payment. Mortgage 100 gave them the option of pledging securities in lieu of a cash deposit. They were able to finance the full $500,000 and keep the $100,000 in their portfolio.
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Mortgage 100 |
Traditional 20%
Down Payment |
| Total purchase price |
$500,000 |
$500,000 |
| Down payment |
0% |
20% |
| Required cash down payment |
$0 |
$100,000 |
| Total loan amount |
$500,000 |
$400,000 |
| Guaranty amount ($500,000 x 30%) |
$150,000 |
$0 |
| Initial collateral value ($150,000 x 130%) |
$195,000 |
$0 |
| Maintenance value ($150,000 x 110%) |
$165,000 |
$0 |
- Based on a $500,000 home, the initial guaranty requirement is $150,000.
- To cushion this guaranty amount against unexpected fluctuations the market value, add 30% to the guaranty amount.
- So, to finance 100% of a $500,000 mortgage loan, you’d need a value of $195,000 in eligible securities. In addition, you must maintain at least 10% over the guaranty amount in the account, or $165,000
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1 Merrill Lynch does not provide specific recommendations on tax issues. Consult your tax advisor regarding the deductibility of interest expense. Interest expense may not be deductible for all taxpayers
Merrill Lynch Credit Corporation is an indirect wholly-owned subsidiary of Bank of America Corporation.
© Copyright 2010 Merrill Lynch Credit Corporation. All rights reserved.
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