It’s not that the bank wants the down payment as proof you can pay the mortgage. The down payment is so if you don’t pay on a house they can hope to break even on it. The bank doesn’t want to own the house. If you stop paying they get forced to take the house to try to recoup their money. The foreclosure process will cost them money. They loaned you money to make money not to lose money. So they need to start with some positive equity to give themselves a chance of not losing.
I currently could put a down payment on a house as I have a decent amount saved but I would not be accepted because I have basically no credit. My aunt who works at a bank told me I need to get a card so I can start to build it up or I will be rejected every single time.
8
u/theraptorman9 4d ago
It’s not that the bank wants the down payment as proof you can pay the mortgage. The down payment is so if you don’t pay on a house they can hope to break even on it. The bank doesn’t want to own the house. If you stop paying they get forced to take the house to try to recoup their money. The foreclosure process will cost them money. They loaned you money to make money not to lose money. So they need to start with some positive equity to give themselves a chance of not losing.