Know The 5 Cs of Credit to Accelerate a Submission
Make sure to download this shareable, one-page PDF: Consumer credit tips.
Before you submit an alternative deal to your lender, it’s important to dig deep into your client’s story. The more information gathered from your clients, the quicker the process will be. Accelerate your submission and look like a star broker!
Lenders analyze deals using the five Cs of credit, so we’ve built some questions to ask your client, reflecting that.
Going over them with your client before submission will make your application more robust and you’ll get a true sense of whether the deal is a fit for your lender.
What is the down payment amount and where is it coming from?
What is your client’s net worth?
What assets does your client have?
- Vacation homes
- Rental properties
This information will help your underwriter make sense of what your client spends their income on.
Has your client ever filed for bankruptcy or consumer proposal?
If so, was there a foreclosure? Have they been discharged? What is the balance owing?
Who and what is registered on title?
No surprises is a good thing in this case.
Are your client’s credit issues an isolated occurrence?
Was there an injury or a death in the family?
Significant life events can happen to anyone and we understand that. If your underwriter can see the whole story, they’ll have more ability to approve the file.
What is your client’s income?
Double-check the client understands their compensation breakdown. Allowances, bonuses and shift pay can’t be used in all cases.
Are their hours guaranteed?
What is the minimum guarantee if your client is working part-time?
Does your client own any other properties?
What condition is the property in?
- What year it was built?
- Is there any work in progress?
- Does anything need replacing?
- Anything unique about the property?
- Square footage
- Train tracks
- Cell towers
- Power lines
- Environmental protected areas
Where is the property located? Is it within the lender’s lending areas?
What is your client’s marital status?
- Common law
Is there support payable or received?
Try to complete the application fully and accurately as all the information on the application ultimately leads the lender through an assessment on character.
- Who are we lending to?
- Are they likely to be able to handle the obligation?
- Do they demonstrate pride of ownership?
- Have they gone through a major life event and are working their way out of a tough situation?
The lender, after reviewing the application notes and details, should know your client as well as you do.