This week one of our lenders sent an email to remind us how they look at a mortgage application for a client. They call this the 5 C’s of Credit. I thought you might find it interesting.
“Remember it’s not how nice or good they are, but whether they qualify for the loan.
Character – Based on stability… Time at current job/residence.
Collateral – Marketability of real estate in case of default.
Capital – Funds invested in purchase or equity in home for refinance.
Also reflects your ability to save / net worth.
Credit – Evaluates your ability to maintain your obligations and determine how well you live within your means.
Capacity – Whether you have the means to support the debts. “
You will notice they did not say it is about how long you have had your finances with that institution or how well you get along with the bank personnel.
Sometimes clients tell me they are concerned that if they do not get their mortgage with their current financial institution the bank will not approve them for a loan in the future. This is simply not the case. If you have a stable job, pay your bills on time, manage your debt by living within your means and positive net worth, you will be able to get a loan at any of the many financial institutions in Canada.
Look out for your financial future. Make financial decisions that are in your best interest, not the banks!!
If you are not sure what is your credit worthiness and want a financial review, call me. I will sit down with you and one of our financial planner partners and together we develop your financial plan and mortgage plan.
Karen Boies Mortgage Planner
“The content and opinions expressed are solely the expressions of the writer. They do not represent the views or opinions of Mortgage Centre Canada and The Mortgage Centre – City Wide. Neither Mortgage Centre Canada nor The Mortgage Centre – City Wide warrant the accuracy of what is presented.”