California Home Loan Lender Wants a Profit

Getting a California home loan today is going to be the most important financial transaction that will occur for you and your family this week and it is critical to keep in mind that it is a totally impersonal experience.  Business, getting a mortage or a home loan, is all about money and nothing else.  The lender has money to lend to you for the purchase of real estate.  The lender has money to loan against the equity in the house.  The lender has money to help you refinance the house.  The lender is a bank or private individual or a Real Estate Investment Trust (REIT).  In either case, you do not have a relationship with the lender and he doesn’t have one with you today.  So, it is just going to be business.

 

Now the chances are that you aren’t going to personally know this lender.  The lender may or may not have their money in California and their main office may not even be in the State of California, but they will have jumped through hoops with the State of California licensing board for lenders and they will have the right to lend money in California.  That said, who cares?  We all care.  You want money and they want to lend when the circumstances of the loan meet their criteria.

 

So, the criteria is based on a formula that the lender has devised to make a profit.  Whether or not your are going to be good for the money and make payments on a timely basis for the long term is part of the formula, but it has nothing to do with you – and it has nothing to do with whether or not you are going to make payments, get behind, catch up, always be on time or default.  The lender’s formula is based on them making a profit – and frankly – at this time we don’t know precisely what that formula is going to be – and don’t let the lender stick it to you with high rates, high interest charges, high points, high basis points, high fees, high this that and the other things.

 

The lender is going to lend you money if the lender thinks it will make a profit.