These are a good idea if the 25% overage is going to be used to increase the value in your home!

If you are in a hot market were your home is appreciating at a rapid pace then this loan would not put you in as much risk than if you were in an area or economy where the appreciation was moving slowly.

You can expect to recieve a higher interest rate for these loans, becuase of the high risk to the lender.

125% LTV loans are only for borrowers who believe that their home will be worth at least 25% more when it comes time to sell it, unless they have other means to cover the difference.

When you're rehabbing or remodeling your existing home, the 125% loan makes sense because you're tapping the future equity of your home.

Not many investors offer this program anymore. It was a popular loan in the late 90's until about 3 years ago. However, it is still available with select lenders. You need to have excellent credit to qualify for this program since the risk to the lender is high.