Press Release: Local Bank starting to underwrite based on 3 unique principals and you’ll never expect what happened next…

November 13, 2015


….People were able to make their payments, loan default was kept at a minimum and housing markets were stable.

The principals used to underwrite and approve a loan are based on 3 tried and true principals of lending:

  • Credit

  • Capacity

  • Collateral

This is nothing new in the banking world. It’s when lenders begin to get away from these basics that cause havoc in real estate that we have seen in the past. Lets quickly review each of these principals and how it effects your ability to get a loan.


An individual’s credit history allows the bank to assess their creditability. The key question this answers is: Does this borrower make their payments on time, manage finances accordingly, and eventually pay off those debts? A credit score does this for the bank by calculating and analyzing credit history by utilizing credit data and algorithms to give someone a score. Regardless of any controversy of whether this is an effective method for assessing creditworthiness in today’s world, it’s the vehicle being used by all lenders.


Someone’s capacity to repay the loan is assessed through the review of income and assets. The key question answered here is: Does this person have the ability to pay this loan back based on their current income, down payment amount, and debt ratios? The review of income vs debts allows the bank to assess if the monthly payment for this home is too much or will fit within the debts you currently carry.


Collateral review gives the bank piece of mind that even if this loan goes south in the future, the bank/lender will get their money back. Therefore, an appraisal is completed to verify the value of the property leveraged as the collateral for the loan. This value is what the bank uses to underwrite and approve the loan. The bank wants to make sure that the property is marketable in the event they do take possession of the home.


The 3 C’s of Credit, Capacity, and Collateral are the foundation of mortgage lending. Traditional and local banks across the country have been lending on these principals for years. It’s very likely that when your grandparents bought their first home they too were evaluated on the 3 C’s.

Call me to find out how you fit into each category.

Please reload

Featured Posts

As Prices Rise, Pre Approval is Wise

February 3, 2017

Please reload

Recent Posts
Please reload

Follow Us
Please reload

Search By Tags
Please reload

  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square


O: 614-602-3646

C: 740-398-4917







State Bank

4080 W Dublin-Granville Rd

Dublin, OH 43017

The State Bank and Trust Co. and its loan officers, are not liable for information, claims or agreements made by/between the public and third-party entities. These third-party entities may include, but are not limited to: builders, developers, or real estate agents. Even though the loan officer co-sponsoring this site makes efforts to update the information contained, much of it is provided by independent vendors and data feeds, and thus, this site may contain errors, outdated information or purchase conditions, promotions, incentives and/or possible omissions. The State Bank and Trust cannot guarantee the accuracy of information provided, and we encourage buyers to complete their own due diligence in making a decision to build or purchase a home. We also suggest that you seek the professional representation/advice of a licensed Realtor®, as well as any other licensed professional that is appropriate to your purchase decision, including, but not limited to: attorney, accountant, or certified financial planner. Visitors to this site are responsible for the use and decisions made regarding the purchase of a home with regards to the information contained herein. The State Bank and Trust Co. is an Equal Housing Lender. 

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant. The State Bank and Trust is an Equal Opportunity Lender. | Privacy Policy