You’d like to buy a home but you’re not sure what mortgage lenders look for in a borrower or whether you could qualify?

Here’s a quick snap shot of the 4 Cs lenders consider:

  • Capacity – Your current and future ability to pay back the loan.
  • Capital – The money and savings that you have on hand plus investments, properties, and other assets that could be sold fairly quickly for cash.
  • Collateral – The value of the home that you plan to buy.
  • Credit – Your record of paying bills and other debts on time.

What about the down payment – the percentage of the cost of the home that you put down in cash when you buy it? Although 20 percent is something of a magic number, many homebuyers put down much less. Freddie Mac’s new Home Possible AdvantageSM mortgage, for example, is available to qualified borrowers with as little as 3 percent down. And a majority of homes qualify for down payment assistance.


This blog post was originally featured on Freddie Mac’s Blog Post.

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.