The Fears Of Mortgage Lenders

By Author: Gregory van Duyse
Total Articles: 9
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What do home lenders fear?

In order to understand mortgage loans better, you have to understand the fears of a mortgage lender. Once you understand their point of view better, you can see whether they will accept your mortgage application - taux hypothecaire.

There are two major fears in the lending industry:

Fear of losing money

A lender does not want to lose money; neither the capital for the original home loan, nor the lost interest payments on the home loan. From their perspective, this is an all too common occurrence - taux hypothecaire

In this case, the lender will have even more costs over the loss of capital and interest, because he has to hire a lawyer to start foreclosure proceedings.

On top of these expenses, the lender has the risk that the home will not sell for enough to cover the mortgage due and the lost interest payments (taux hypothecaire), and the legal fees.

To lose time

Mortgage lenders are not interested in property management. They want to lend money and collect payments. Working with lawyers, taking steps for foreclosure, taking care of a home ...
... while it is in foreclosure and before it is resold are not the activities that he prefers to spend his time on. He looks upon this as just a loss of time.

Even in the instances where the lender is not going to lose the principal (taux hypothecaire) because the loan is guaranteed by the CMHC or some other insurer, he will still want to avoid foreclosure by making sure that he only has good loans in his portfolio and that each borrower is a good risk.

Many times, people ask Why won't the bank give me a mortgage-they have my house as security?

Well, they don't want your home, only your mortgage payments - taux hypothecaire.