What are the lenders criteria in making a loan?
Every lender uses its own criteria in making a determination whether to approve the borrower’s application for a loan. However, most lenders follow guidelines set forth by Fannie Mae (Federal National Mortgage Association) or Freddie Mac (Federal Home Loan Mortgage Association). The general wisdom is that lenders look to the “Three C’s” e.g. the borrower’s credit history, capability to pay, and collateral. The credit history is examined through a credit report provided by a credit reporting agency. The cash on hand is verified by your depository and the collateral or property you finance is appraised by a state licensed lender approved appraiser.
