While you are in the process of getting a mortgage many lenders will look closely at your application before agreeing to give the approval for financing.

Following are five items that lenders consider before approving a loan, they are often referred to the ‘5 Cs of Credit’ – Character, Collateral, Capital, Credit and Capacity:

Character – This is a subjective opinion of your trustworthiness to repay the loan. For this, your educational background, professional experience, length at your current employer and current residence will be considered.

Collateral – The lender will be looking for assurance that if the borrower was unable to repay the mortgage, the property that is mortgaged can be resold. This is why lenders require an appraisal for the home they will be approving a loan for.

Capital – The higher the down payment, the more likely it is that you will keep up with the mortgage payments.

Credit – A lender will contact a credit agency that has information regarding payments on major credit cards, auto loans, leases, etc. for the last six years and calculate a person’s credit score.

Capacity – Lenders will review your income level and financial obligations. Many lenders will follow the rule that a mortgage should not be given if it is more than 32 percent of your gross income.

For more information on living in a progressive city like Hoboken, where they’re always coming up with new ways of making the city a better place to live, contact Eddie Perez, Broker-REALTOR, CDPE. Eddie’s market includes Hoboken, Jersey City, Weehawken and Union City. Eddie can also be reached by phone at 201-344-2886.


re/max, logoEddie Perezfacebook, logo
Broker - REALTOR
RE/MAX Gold Coast Realty
56 Newark St.    ·      Hoboken, NJ 07030
Phone (201) 344-2886   ·   Office (201) 795-5200 ext 423

E-Mail Me 

 
 
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6 Comments on What are the “Five Cs” of Credit?

OCT
29
2010
254,051 Points 1 Featured Post Attended Rain Camp Called Shot Master

The "Five Cs" what a great way to put it. Buyers don't know how difficult the lending experience can be. Thanks for the post.
8:22pm • #1
708,340 Points 47 Featured Posts Localism Sponsor Outside Blog Called Shot Master

This is a great one, just like we remember about diamonds Color, Carat, Cut, Clarity & Cost:))))
8:27pm • #2
255,087 Points 1 Featured Post Outside Blog Attended Rain Camp Called Shot Master

I like the Five C's for credit,easier to remember the important information to present to our buyers.  Margaret C.
8:48pm • #3
608,900 Points 14 Featured Posts Outside Blog Called Shot Master

Oh I like this!!!  It is so simple of an explanation!!
9:31pm • #4
OCT
30
2010
455,527 Points 1 Featured Post

Good Morning Eddie, excellent way to present it, thanks for sharing the idea.
7:20am • #5
NOV
01
2010
159,584 Points 2 Featured Posts Attended Rain Camp

Thanks, everyone, for your comments.Though the explanation is simple, it is essential for buyers to understand how important these things are for successfully getting the loan.

Endre, excellent comparison!
11:59am • #6


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Eddie Perez - Hoboken Condo Living

Hoboken, NJ

More about me…

RE/MAX Gold Coast Realty

Address: 56 Newark St, Hoboken, NJ, 07030

Office Phone: (201) 795-5200 x 423

Cell Phone: (201) 344-2886

Email Me

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