Let’s Simplify the Home Loan Process
Understanding the 4 C’s of Credit with Orchard Mortgage Brokers
As mortgage brokers dealing with people all across Australia, we speak every day to people who are seeking new home loans or looking to refinance their existing mortgage. One question we consistently hear is:
“Why is it so hard to get a bank to lend to me?”
Or the old classic:
“Banks only lend you money when you don’t need it!”
Sound familiar? You’re not alone.
The team at Orchard Mortgage Brokers on the Sunshine Coast (Mooloolaba) and in Brisbane (Paddington), help to simplify the home loan process, by explaining the process and providing you with lending options.
While lending policies have changed over the years, the core principles of how lenders assess your loan application remain the same. It all comes down to the 4 C’s of Credit—the key areas every lender looks at when deciding whether to approve your home loan.
1. Character (Your Credit History)
This is all about how you’ve handled credit in the past. Your credit history starts when you take out a credit card, personal loan, or similar finance. Lenders use your credit report—which shows your repayment history and financial behaviour—to help determine your reliability as a borrower.
They’ll look at your track record of repayments, current debts, and any negative marks like late payments, defaults, or bankruptcies. Some lenders may also have minimum credit score requirements.
A good credit score usually signals lower risk—making it easier to get approved and secure better loan terms.
2. Capacity (Can you afford the loan?)
This is a lender’s way of asking: Can you comfortably make the repayments?
To determine this, they’ll consider:
Your income source (employment, business, etc.)
Your regular living expenses
How much surplus income you have after bills and obligations
Each lender calculates borrowing capacity differently, so the amount you can borrow may vary. If your income clearly supports the loan, you’re in a solid position.
3. Collateral (What are you offering as security?)
Collateral refers to the property you’re using to secure the loan. Lenders will evaluate:
The property’s type, condition, and location
The Loan-to-Value Ratio (LVR)—how much you’re borrowing compared to its value
Standard homes in typical residential areas can often be borrowed against up to 95%. However, unique or specialised properties—like rural homes, small apartments, or mixed-use buildings—may have more restrictive terms.
4. Current Conditions (What else is going on?)
Need Help Navigating the Process?
Finding the right home loan and the home loan application process does not have to be hard.
📍 Visit our helpful Mortgage Brokers in Brisbane (Paddington) or Sunshine Coast (Mooloolaba).
📞 Let’s make your home loan journey simple—contact our friendly team today.