Wednesday Jul 13, 2022

What’s the 3 main things banks look for in your application?

What are the 3 main things that banks look for in your mortgage applications?

The 3 C's of Credit, Character, Capacity and Collateral

Our special studio guest this week is Dr Tony Nguyen, mortgage broker and head of DM & King Financial. Tony takes us through the finer points of these three very basic but vitally important items.

The 3 Cs of credit are a common set of principles that banks and other mortgage lenders consider when assessing your mortgage applications.

It doesn’t matter if it’s a home loan or an investment property loan. The three Cs not only help the lender understand your needs and their risk but can also help them assess your deal much more efficiently.

Character:

From your credit history, a lender may decide whether you are someone they can depend upon to repay a debt. They look at items such as

Have you had a loan before?
Are you paying your bills on time?
How long have you been at your present address?
How long have you been at your job?

Capacity:

This refers to your ability to repay the debt. You got enough income to support the loan repayments long term.

What is your current income?
Do you have any other current loans?
What are your living expenses?
How many dependents do you have?

Collateral:

Any lender wants to know if you have any valuable assets, especially real estate or savings with which could be used to secure or make the repayment.

What’s the 3 main things banks look for in your application?

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