Final answer:
A larger down payment increases the amount of mortgage a person is eligible for, by signaling a lower risk to the lender.
Step-by-step explanation:
The amount of mortgage a person is eligible for would be increased by a larger down payment. This principle can be understood by taking into account how a down payment affects the risk profile of a loan. If a borrower makes a significant down payment, say 20% of the home's purchase price, the lender perceives a reduced risk because the borrower has already invested a substantial amount of money. Consequently, the lender may be more willing to offer a larger mortgage amount. However, having higher credit card debt, lower income, or a poor credit score would generally decrease the amount of loan a person is eligible for since these factors increase the perceived risk to the lender.