Property-Collateral

Finally the property itself, which in a mortgage application could also be called “Collateral”, is the last and most important factor to be considered in underwriting a mortgage application. First , the location of property should be acceptable to the lenders. Some lenders don’t lend money in certain areas, second the value of the property needs to be acceptable for the lenders to approve an application. In other words lenders look at Loan to Value (LTV) ratio to determine if they are comfortable with the requested mortgage amount. Finally , sometimes in spite of a desirable LTV, they decline to proceed with the loan application due to the certain problems that the property are involved with. The best example would be “Leaky Condo” issue in British Columbia.