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A Mortgage Company's Take On The Downpayment
The reason for this is quite simple. Underwriting guidelines are much stricter than pre 2006. By having a down payment it gives the lender some indication that you have the propensity to save money. People who save money are better credit risks than those who don’t. By the way, when you go to get your mortgage you should know that the lender will scrutinize everything about your financial profile. This means they will check where your down payment comes from. They want to see your last three bank statements. If the money just appears out of nowhere the lender will want to know where it came from. The reason is they want to know the money came from your means. Additionally, a big no no in the lending business is getting loan to use to obtain a home mortgage. The other point of putting down a down payment is it gives the borrower a stake in the home. They actually have a stake in the home by putting down money as a down payment. When someone has a vested interest they are less likely to call it quits in the event of a financial storm. The last reason for the down payment is to create a financial cushion between the value to the home and the mortgage amount. The greater this cushion the less likely the mortgage company loses money in the event of foreclosure. Additionally, the greater the down payment the more likely the lender or broker will have alternative mortgage options. A greater down payment gives the lender more leeway to do so. Article Directory: http://www.articledashboard.com You can get your Houston home mortgage and refinance info at this site. Also, a tremendous Dallas mortgage and refinancewebsite has a great refi calculator. |
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