What are the four Cs of underwriting?

Question

Accepted Answer

The 4 Cs are key factors in mortgage underwriting: Credit, Capacity, Capital, and Collateral.

Credit: Refers to the borrower's credit score and history. For example, a score above 700 is generally considered good.
Capacity: Assesses the borrower's ability to repay the loan, often evaluated through debt-to-income ratio. A ratio below 43% is preferred.
Capital: Represents the borrower's assets and savings. For instance, having a significant amount in savings can strengthen an application.
Collateral: The property being financed serves as collateral. Lenders evaluate its value to ensure it covers the loan amount.

Accepted Answer

Credit, cash or capital, capacity and collateral

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