Thursday, July 10, 2008

The FOUR C's

This article was posted on bankrate.com and provides a great mnemonic called the “Four C’s”

The four C's
  • Capacity, which refers to the adequacy of the borrower's income to pay
    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.
    - Greg Gwizdz, national sales manager for Wells Fargo Home Mortgage in Des Moines,
    Iowa. 7/10/2008


  • If you are okay according to the four C’s you should be able to get a mortgage. You might also be able to obtain a mortgage if one of these C's is a little weaker then the other one.

    For example, you have a ton of equity (>35%) and have a lower credit score. You will be able to get a loan or vice versa, you have little equity, but a terrific credit score.

    The truth is that there are tons of products on the market for consumers. Don’t be too concerned about not getting a loan if you live within your means and have a good credit score.

    If you have any questions regarding your current mortgage, please contact us @ www.thesatorigroup.org.

    If you meet all of the four C's you might be a perfect fit for our SWBStm.

    http://www.bankrate.com/brm/news/mtg/20080710-mortgage-requirements-a1.asp

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