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| *Loan,banking and credit>>>mortgage loan |
How come mortgages are so easy to get yet any other loan is near impossible? |
is it because of equity. but if we have credit scores so companies can limit or stop our purchase and debt power than why would they stop us from getting a personal loan that might help consolidate debt but they have no problem giving us a loan for a house worth a couple 100,000 so we can turn around and get a home equity and then have money?? it doesnt make sense to me? whats the secret you dont deny me a credit card then give me a house? 1. Mortgages are not particularly easy to get. Income, credit, other obligations are all taken into account. 2. Mortgages SEEM easier to get for several reasons. a. There is real property securing that loan. b. That property appreciates in value over time. What the above means is that the bank is taking on significantly less risk by lending on a home versus a car, business, or even college. A 20% down payment smooths the mortgage process significantly because the bank has almost zero risk. Even if you never make a single payment, odds are they can foreclose and sell the house for more then you owe. No risk to the bank. That is why you need Private Mortgage Insurance (PMI) on mortgages for more then 80% of the property value. (i.e. less then 20% down.) Compare that to a new car loan. A car does not go up in value over time. If you default, the bank will lose money repossessing it. Its because housing is most people primary expense and will usually be paid before anything else. other loans are usually for discretionary spending and when money gets tight people will default on those first. because the house is collateral, if you dont pay they get the house. Credit cards cant come and take your clothes away that you charged if you dont pay m Mortgages are not easy to get. The main reason they are accepted when other loans are denied is because there is a piece of property attached to the loan that the company can take back if the person does not pay the loan. You can use a home equity loan instead of a personal loan but make sure that you continue to pay off both loans so they don't have any reason to take back your house. because it is a commonly-requested, asset-backed loan. All of the previous posters are correct. Add to what they have already pointed out the fact that homes don't move around. (The lender always knows where the home is). And the fact that homes increase in value rather then decrease like cars. |
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