Borrowing capacity, also referred to as loan eligibility or credit capacity, determines the maximum amount of funds that an individual or entity can borrow from a lender. It is calculated based on factors such as monthly income, existing liabilities, credit score, and financial assets. Understanding borrowing capacity is critical for making informed financial decisions and optimizing loan approvals.
Credit (Mortgage) Scoring entails evaluating and rating a loan applicant based on their creditworthiness, impacting eligibility for standard or sub-prime mortgage terms.
