25% Mortgage loan down payment rejected

[California_Republic]

Why would a bank refuse to take a 25% down payment. Requiring 20%

They just keep arguing that we could do better with the money in the market.

[cpamomfromtexas]

1. Well thats half true, but only if market is going up.

[marylandblue]

2. They make money on the interest payment so you are cutting their profit

[California_Republic]

4. So we just need to find another bank?

[marylandblue]

5. Yes, or a mortgage broker

[exboyfil]

6. I love my credit union

Last refinance they kept the mortgage in house. I almost felt like Jimmy Stewart in It's a Wonderful Life. How often does this happen anymore? I have gotten tired in the past of trying to track down my mortgage holder (same with my student loan earlier).

[exboyfil]

3. Seems very odd

Could the paperwork have already been prepared? If there were points for origination fee and buying down interest rate, the bank would get less dollars for the loan.

As far as the mortgage, you could kick in the 5% in the first payment. Disadvantage is that your payment amount would be higher per month, but the advantage is that the loan would be paid off sooner.

Also you get interest rate breaks for higher amounts for your mortgage. For example when I refinanced my house to get a lower interest rate, I did $100K (actually owed less), but this gave me a lower interest rate. Could you be at one of those break points?

What you do with your finances should be no business of the loan company. Usually they only care about the credit rating and whether the appraisal comes in at the needed value. It seems unprofessional to me even.

[BadgerKid]

7. Along the lines of bank losing money

Maybe it has certain criteria in mind to meet in order to sell the loan. Maybe this bank is interested only in a quick buck. It pays to shop around.