When we quote you a rate, you might imagine that we input your loan data into a computer program and it magically pulls up a rate. This is true to some extent, but it’s not the whole story.
For the past few years, home prices and mortgage rates have been historically low, and affordability has been historically high. Buyers may have become a bit complacent because of how unchanging this situation seems to be.
Having been in the industry over a decade I’ve seen variations of this article referring to the 4 C’s of Mortgage Underwriting (Capacity, Credit, Cash, Collateral). While it gives a potential borrower a broad understanding of what a lender looks for in “qualifying” one for a loan, it neglects to address the more critical point of “affordability.”