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 within Merrill Lynch Home Loans^TM guidelines.
• 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.

Merrill Lynch’s Mortgage 100^® and Parent Power^® programs require the pledge of eligible securities owned by an individual and maintained in a Merrill Lynch, Pierce, Fenner & Smith, Incorporated brokerage account. Member, Securities Investor Protection Corporation (SIPC). The Mortgage 100^® and Parent Power^® programs may not be suitable for everyone and a default on your mortgage could result in both the loss of your home and your securities. Should the value of the securities pledged as collateral decrease below a certain level (as specified within the loan documents), the deposit of additional assets and/or liquidation of assets may be required. Merrill Lynch may liquidate some or all of the securities in the account without contacting you. You are not entitled to an extension of time to meet a collateral call or choose which securities in your account are sold to meet the collateral call. Liquidation may result in adverse tax consequences. Mortgage interest may not be deductible if tax-exempt obligations are pledged as additional collateral. Trading within the brokerage account for the 100% financing programs is subject to restrictions.

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.

	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 Guaranty amount is $150,000.
• To cushion this Guaranty amount against market fluctuations add 30% to the guaranty amount to get to the Initial Collateral Value, which is the value needed in the pledge account at the time of closing.
• So, to finance 100% of a $500,000 mortgage loan, you’d need a value of $195,000 in eligible securities at closing. After the closing the value of the account(s) can fluctuate due to the market to 10% over the guaranty amount in the account, which is the Maintenance value, or $165,000. If below the Maintenance value the client will be in a collateral call. If in a collateral call the deposit of additional pledge eligible assets will be needed so that the account is above the Maintenance value in order to avoid the liquidation of the account.