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Why Do Lenders Ask About Assets for a No Cost Mortgage?

Why do mortgage lenders ask about your assets for a no cost mortgage? Why are my assets relevant to the mortgage application if I am not paying closing costs?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

Lenders are permitted to ask you questions about your financial profile, such as your monthly income, assets and debt when you apply for a mortgage.  For example, lenders want to know your monthly gross income and debt expenses to understand what size mortgage you can afford. Lenders also ask about your assets, even if you are getting a no cost mortgage, because your assets may demonstrate your financial wherewithal. Additionally, some mortgages require that borrowers maintain a certain amount of savings in reserve when your loan closes which makes a borrower's assets relevant to their loan application. To summarize, lenders need to understand your complete financial profile to determine your ability to qualify for and ultimately repay the mortgage.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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