paying all cash

[jeeman]

EconProf,

That makes total sense. The guy wanting to buy needs a loan because he wants to make a house purchase, which most people can’t do without a mortgage.

The high net-worth individual who owns a house outright wants a loan to do what? Gamble the money? Throw into the stock market? What exactly is that guy going to do with that money, if he already is well-to-do? It seems riskier to me.

Jeeman

[gandalf]

And yet, the loans are mortgages. They are borrowed against underlying property assets either way. The bank should be looking first and foremost at the value of the asset, and whether the amount being borrowed is covered by the collateral. Both new and existing owners bring credit risk to the table. Key considerations ought to be that the asset is properly valued and the borrower demonstrates ability to repay.

[gandalf]

And yet, the loans are mortgages. They are borrowed against underlying property assets either way. The bank should be looking first and foremost at the value of the asset, and whether the amount being borrowed is covered by the collateral. Both new and existing owners bring credit risk to the table. Key considerations ought to be that the asset is properly valued and the borrower demonstrates ability to repay.

[gandalf]

And yet, the loans are mortgages. They are borrowed against underlying property assets either way. The bank should be looking first and foremost at the value of the asset, and whether the amount being borrowed is covered by the collateral. Both new and existing owners bring credit risk to the table. Key considerations ought to be that the asset is properly valued and the borrower demonstrates ability to repay.

[gandalf]

And yet, the loans are mortgages. They are borrowed against underlying property assets either way. The bank should be looking first and foremost at the value of the asset, and whether the amount being borrowed is covered by the collateral. Both new and existing owners bring credit risk to the table. Key considerations ought to be that the asset is properly valued and the borrower demonstrates ability to repay.

[gandalf]

And yet, the loans are mortgages. They are borrowed against underlying property assets either way. The bank should be looking first and foremost at the value of the asset, and whether the amount being borrowed is covered by the collateral. Both new and existing owners bring credit risk to the table. Key considerations ought to be that the asset is properly valued and the borrower demonstrates ability to repay.

[peterb]

gandalf’s got it right. This is why loans are collateralized. Risk is difficult to accutately mitigate in most circumstances.
Value the asset incorrectly, shame on you.

[peterb]

gandalf’s got it right. This is why loans are collateralized. Risk is difficult to accutately mitigate in most circumstances.
Value the asset incorrectly, shame on you.

[peterb]

gandalf’s got it right. This is why loans are collateralized. Risk is difficult to accutately mitigate in most circumstances.
Value the asset incorrectly, shame on you.

[peterb]

gandalf’s got it right. This is why loans are collateralized. Risk is difficult to accutately mitigate in most circumstances.
Value the asset incorrectly, shame on you.

[peterb]

gandalf’s got it right. This is why loans are collateralized. Risk is difficult to accutately mitigate in most circumstances.
Value the asset incorrectly, shame on you.

[Author]

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