The Twenty Percent Mortgage Rule

When it comes to mortgages, the twenty percent rule is a critical thing you should understand. It has to do with the comfort level of lenders. What is it? If you are putting less than twenty percent in cash into the deal, the lender views the loan as one in which it is taking almost all the risk. If you put twenty percent of more down, the lender views you as an old friend who is a great risk since you are putting your money where your mouth is if you will. This is why you must pay private mortgage insurance on loans with less than twenty percent put down. It is also why lenders will pay more attention to your credit problems.