RICHMOND, Va. (WWBT) - Want to know what lenders look at when deciding whether to approve you?
There are “5 C’s of Lending.” First thing lenders look at before they approve a loan is Character. And the way they judge character is through your credit score. 620 is good place to start especially if you’re looking to buy a home. Anything below 580 can make it a little difficult to get credit.
The second C is Capacity. How much you can actually borrow based on your debt?
Third is Capital. Cherry Dale with the Virginia Credit Union helped us put this list together. She explains what lenders are considering when it comes to “captial”.
“How much cash do you have? What are your assets when it comes to purchasing? Especially when it comes to buying a house, a lender’s going to want to see what your capital assets are," said Dale.
The 4th C is conditions: As in, what is rate environment? What is the interest rate?
And the 5th C is Collateral. Lenders want to know how much the item you are buying is worth. For example-- that car or house.
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