Money Matters: Four C’s of Home Loans

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Hey! Today, let’s talk about the 4 C’s of home loans, the factors that lenders consider before making a home loan.

The 4 C’s of loan and credit are: capacity, capital, credit and collateral.

Capacity is your present and future payment obligations, as well as your debt to income ratio. Capital is the value of your assets, including cash, savings, investments, property, and other things that you could sell for cash. Credit is how responsibly you have paid bills or debts in the past, and includes your credit score, and Collateral is the property or other assets offered to secure the loan.

Remember the 4 C’s as you plan for the future. It’s important to make good saving and spending decisions now, so you can set yourself up for financial success.

Happy house-hunting! See you next time on Money Matters.

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