Traditionally, lenders have refused to accept mattress money from home buyers. However, Freddie Mac has said that in some cases it would allow buyers to use cash kept at home providing they do not have a savings or checking account.

The new rule makes sense because 13 percent of all U.S. households to not have such accounts, according to one study by the Federal Reserve.

Can I Buy A House With Mattress Money? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: account, bank, cash, mattress, money, savings

So, one choice is to look for financing with as little down as possible. A second choice is to look at RAM financing — a reserve account mortgage.

With a RAM loan you might get 100 percent financing. At the same time, you would deposit an asset with the lender — say the stock you do not want to sell.

The lender then holds onto the stock until the property has a certain level of equity caused by loan amortization (reducing the size of the loan through payments) and, hopefully, increasing property values. The borrower has 100 percent financing.

RAM financing raises important questions: Who gets the interest on the account? What if the value of the securities declines? What is the monthly loan payment compared with financing that requires a downpayment? When is the stock returned to the owner? Is all interest deductible? Etc.

Mortgage lenders, tax professionals, and securities brokers can provide additional information. RAM financing arrangements should be reviewed by your attorney before acceptance.

How can we come up with a real estate down payment without selling our stock? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: account, borrow, down payment, mortgage, reserve