What factor is considered when a lender asks about a borrower's savings for a down payment on a home?

When a lender inquires about a borrower's savings for a down payment on a home, the factor of capital is essential. Capital, in the context of a mortgage, refers to the borrower's own funds, which are often shown through savings or investments that can be used for the down payment on a property. A higher amount of capital indicates the borrower's ability to make a significant investment upfront, which can demonstrate financial stability and commitment to the purchase.

This factor is particularly important because lenders are more likely to approve loans for borrowers who can contribute a substantial down payment, as it lowers the lender's risk. It also reduces the overall loan amount, potentially improving the terms of the mortgage, such as the interest rate. Having adequate capital shows that the borrower is financially responsible and has the means to manage homeownership costs effectively.

Other factors mentioned, such as income, debt-to-income ratio, and credit history, are indeed relevant to a lender's overall assessment of a borrower's ability to repay a loan. However, capital specifically addresses the resources available for the down payment, which is a critical component of securing a mortgage.