A mortgage capacity report is an essential part of the mortgage process. They help lenders determine how much money a potential borrower can borrow. The information is based on the borrower’s current income, expenses, and other financial obligations. The MCR helps lenders ensure a borrowers can make mortgage payments comfortably and on time.
What should I know about this?
The MCR assesses a borrower’s ability to repay by considering their existing financial commitments, including credit card debt, auto loans, and other debts. It also looks at whether they have enough cash in reserve after mortgage payments to cover unexpected costs or periods of unemployment. A good MCR can give potential borrowers an edge when negotiating with banks and lenders for better interest rates or terms.
The MCR includes critical details such as monthly income (including wages, business income, and investments), total liabilities, funds available for mortgage repayment, and repayment capacity. It also considers any mortgage insurance or government mortgage guarantees available to help cover mortgage payments or supplement income if the borrower falls behind.
We hope this information has been useful to you.
