ickplant@lemmy.world to Lemmy Shitpost@lemmy.world · 12 days agoA conundrumlemmy.worldimagemessage-square251linkfedilinkarrow-up11arrow-down10
arrow-up11arrow-down1imageA conundrumlemmy.worldickplant@lemmy.world to Lemmy Shitpost@lemmy.world · 12 days agomessage-square251linkfedilink
minus-squarePeriodicallyPedantic@lemmy.calinkfedilinkarrow-up0·11 days ago you need to pay us interest because we’re taking the risk. Also you need to give us a down payment to offset our risk.
minus-squarenull_dot@lemmy.dbzer0.comlinkfedilinkEnglisharrow-up0·10 days agoCorrect. Less down payment means more risk and therefore more interest. Its pretty simple really.
minus-squarePeriodicallyPedantic@lemmy.calinkfedilinkarrow-up0·10 days agoBut if you don’t pay, they get the house. There is no risk of loss, only risk of not maximizing profit.
minus-squarenull_dot@lemmy.dbzer0.comlinkfedilinkEnglisharrow-up0·10 days agoForeclosing is a very expensive process. If you borrow 100% of the purchase price and the bank has to foreclose they would incur a loss.
Correct.
Less down payment means more risk and therefore more interest.
Its pretty simple really.
But if you don’t pay, they get the house. There is no risk of loss, only risk of not maximizing profit.
Foreclosing is a very expensive process.
If you borrow 100% of the purchase price and the bank has to foreclose they would incur a loss.