A client has a debt-to-income ratio of 36% and is purchasing a home for $162,000 with an appraised value of $155,000. What factor of creditworthiness is most likely an obstacle to the purchase?

The correct answer highlights the factor of collateral as a potential obstacle in this scenario. In real estate transactions, collateral refers to the asset being financed—in this case, the home itself. The appraised value of the property is $155,000, which is lower than the purchase price of $162,000. This discrepancy may raise concerns among lenders since they typically prefer to see that the purchase price aligns with or is below the appraised value. If the home is purchased for more than what it appraises for, it suggests a lack of sufficient collateral backing the loan, which can lead to challenges in securing financing.

When it comes to capacity, while the debt-to-income ratio of 36% is within acceptable limits for many lenders, the primary issue at hand is the inadequate collateral due to the property’s lower appraised value. Character typically relates to a borrower's credit history and reputation in managing debt, which is not an issue pointed out in this scenario. Capital involves the borrower's financial reserves or down payment, but is not directly relevant given the focus on property valuation. Therefore, collateral becomes the most pressing concern regarding the client's ability to secure the needed financing for the home purchase.