The Four Cs of Underwriting

When verifying the documentation on a mortgage loan file, loan originators, loan officer assistants, processors and underwriters keep in mind what is known as the four C’s of underwriting. They are the four aspects of a loan that must be reviewed to ensure creditworthiness.

The weight that each C carries will vary depending on the type of loan and the lender's risk tolerance. For example, a lender that is more risk-averse may place more emphasis on credit and collateral, while a lender that is more willing to take on risk may place more emphasis on capacity and capital.