Lenders basically weigh three items in order to make a decision on your loan. These three items are CREDIT, CAPACITY, and COLLATERAL, commonly referred to as THE THREE Câ€™S. When all three Câ€™s are strong, the risk on the loan is low. You will then qualify for the best terms. If any one of the three Câ€™s is weak, you will still be likely to qualify for a mortgage, but the risk to the lender is higher, which means the rate may be higher as well. If all three Câ€™s are weak, it can get difficult to obtain a mortgage. Underwriting is a layering of the risk or a blended analysis of these three factors.