Lending and Underwriting

Affordability is the lender's judgment about whether the borrower can realistically carry the requested credit payment load.

Borrower-risk and affordability terms used when Canadian lenders review a credit application.

A co-signer is a person who agrees to share responsibility for a credit obligation with the primary borrower.

A credit application is the formal request a borrower submits when asking a lender for a credit product.

Creditworthiness is the lender's overall judgment of how reliable and risky a borrower appears.

Debt-to-income ratio compares a borrower's debt obligations with their income as part of an affordability review.

A decline notice is the communication telling the borrower that a credit application or request was not approved.

Employment verification is the process of confirming a borrower's job status or employer information during lending review.

A guarantor is a person who promises to support repayment if the borrower fails to meet the obligation.

Income verification is the process of confirming the borrower's income as part of lending review.

Loan underwriting is the lender's review process for deciding whether to approve credit and on what terms.

Pre-approval is a stronger preliminary lending signal than prequalification, but it is still not final approval.

Prequalification is an early estimate of borrowing fit based on limited information rather than a final approval decision.