What Do Borrowers Use To Secure A Mortgage Loan Check All That Apply
Borrowers use various methods to secure a mortgage loan. Here are the common ways: Down Payment : Borrowers often secure a mortgage loan by providing a down payment, which is a percentage of the home's purchase price paid upfront. A down payment reduces the lender's risk and demonstrates the borrower's commitment to the purchase. Collateral : The property being purchased with the mortgage loan serves as collateral for the loan. If the borrower fails to make payments, the lender can seize the property through foreclosure to recover their investment. Creditworthiness : Lenders assess borrowers' creditworthiness by reviewing their credit history, credit score, income, employment status, and debt-to-income ratio. A strong credit profile increases the borrower's chances of securing a mortgage loan and may result in more favorable loan terms. Income Verification : Borrowers must provide proof of income to demonstrate their ability to repay the mortgage loan. Lenders typ