MortgageCast

Lenders use the “Four C’s of Credit”:
Capacity: Your ability to repay the loan, measured by your debt-to-income (DTI) ratio.
Capital: Your savings, assets, and down payment amount.
Collateral: The value of the home you’re buying (determined by an appraisal).
Credit: Your credit history and score, which indicate your reliability as a borrower.

Furnishing the interior is typically the higher priority for most homeowners, as it’s essential for daily living. However, you should also budget for at least basic landscaping (like grass and a few shrubs) to protect your soil and prevent erosion. Major landscaping projects can often be phased over several years.

You are likely a good candidate if:
You want to buy a fixer-upper you couldn’t otherwise afford upfront.
You own a home that needs major updates (like a new roof, kitchen, or addition) but lack the cash to pay for it.
You don’t want to deal with the hassle and higher costs of a separate personal loan, HELOC, or credit card to fund renovations.
You have a solid credit score and a manageable debt-to-income (DTI) ratio.

The appraisal is an independent assessment of the home’s market value, ordered by the lender. It ensures the property is worth the loan amount. If the appraisal comes in lower than the purchase price, it can affect the loan-to-value ratio and may require renegotiation with the seller or a larger down payment from you.