By Marcie Geffner
Posted by Mike Hughes
"It's not enough these days to have good credit and a steady job, as lenders are increasingly picky when it comes to loan approvals. Here's how to make the best impression."
Whether you're buying a home or refinancing an existing home loan, you'll soon find out that lenders today are a picky and demanding bunch when it comes to loan approvals. Even well-qualified borrowers are expected to jump through some pretty high hoops to qualify for financing. But fear not: These tips and suggestions can help you make the best possible impression on the lender of your choice. Just as job hunters may wonder what top employers want to see on a resume, prospective borrowers may be curious about what lenders look for on a loan application.
The four C's: The answer may be summed up with a mnemonic called "The four C's," according to Greg Gwizdz, national sales manager for Wells Fargo Home Mortgage in Des Moines, Iowa.
Capacity, which refers to the adequacy of the borrower's income to cover the interest and principal due on the loan, plus property taxes and homeowners insurance.
Character, which refers to the borrower's track record of paying debts, as evidenced by his or her credit history and credit score.
Capital, which refers to the borrower's down payment (or equity) as a percentage of the current value of the home.
Collateral, which refers to the safety and soundness of the home and the value of the home as determined by an appraisal relative to the agreed-upon purchase price.
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