The 4-C's

This article was posted on bankrate.com and provides a great mnemonic called the “Four C’s”

The four C's

· Capacity,
which refers to the adequacy of the borrower's income to pay
the interest
and principal due on the loan, plus property taxes and homeowners insurance.

· Character,
which refers to the borrower's track record of paying debts
as evidenced by
his or her credit history and credit score.

· Capital, which
refers to the borrower's down payment (or equity) as a
percentage of the
current value of the home.

· Collateral,
which refers to the safety and soundness of the home and
the value of the
home as determined by an appraisal relative to the agreed-upon
purchase
price.
-
Greg Gwizdz, national sales manager for Wells Fargo Home Mortgage in Des Moines,
Iowa. 7/10/2008

If you are okay according to the four C’s you should be able to get a mortgage. You might also be able to obtain a mortgage if one of these C's is a little weaker then the other one.

For example, you have a ton of equity (>35%) and have a lower credit score. You will be able to get a loan or vice versa, you have little equity, but a terrific credit score.

The truth is that there are tons of products on the market for consumers. Don’t be too concerned about not getting a loan if you live within your means and have a good credit score.

http://www.bankrate.com/brm/news/mtg/20080710-mortgage-requirements-a1.asp