Preapproval Process Is More Important Than Ever For A Successful Offer Acceptance

pre-approvalMany of us may think we understand the loan process. We may find it stifling and unfair as to how it appraises an individual’s ability to repay, but we at least understand the basics of debt ratio, assets held, and our credit score, a la FICO. How does Freddie Mac look at the process? Freddie has the “4 C’s.”

1)Capital –Money saved or invested that is liquid.

2)Capacity–current or future ability to make payments.

3)Collateral–The home itself; location and condition would be key.

4)Credit–How good is your credit, i.e., the paper trail as to whether or not you are a good risk for a loan. If you have some blemishes, and most people do, there are companies that fix credit. The amount of money this will cost you is a fraction of what you would spend on a monthly house payment, if forced into a higher rate because of poor credit.

There are always options available. 


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