Your mortgage loan originator will ask you various questions regarding where you have lived for the last few years, where you have worked, how much income you earn, as well as if you have any debt. All of the questions they ask are pertinent to the mortgage pre-qualification process. Your mortgage loan originator will also take a look at what they call the 4 C’s of lending. These 4 items are essential to your loan and have different requirements based on the lender and loan program you choose. Each item will also have an affect on your loan pricing.

4 C’s of Lending:

  • Credit – (Best rates with a 740 or higher FICO Score)
  • Capacity – (debt to income ratios)
  • Collateral – (subject property value & other assets)
  • Cash – (cash to close + reserves)
The 4 C’s of lending are critical for building a borrower’s loan profile. A strong Credit score, large down payment, or extra income can possibly be used as a compensating factor to overcome a shortfall in another guideline.

* Consult with your mortgage loan originator for their lender guidelines.