| When you are looking at a down payment
on anything financed the bank is always asking what
is your down payment. The reason for this question is
so the bank can understand how much of a risk they are
taking with your loan.
Let me explain. If you were buying a home from a friend
and that friend was going to finance the home to you
out of there own pocket what happens if you default
and you had given no down. Your friend ends up taking
a loss of time and money during the months of no payments
and the time period it took for eviction. If you had
given a down payment the friend would not take much
of a hit as it can pay for time and loss in the pocket.
When a home is in foreclosure and the lender is taking
back the home do you think they care if you put a lot
down. Of course, they love it. Banks don't want to see
this happen to people but it does. The fact is that
they really are not to said because you put 10% down
lets say. Lets say you bought a home for 300,000. That
would be 30,000 down. The bank now has no risk, if you
foreclose and lets say it takes 3 months to get you
out on eviction, they are still way ahead.
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