n the world of home loans, of loan applications. They are
nothing is more dour typically stressed out,
sounding than underwriting. overworked individuals. They also
Cutting to the chase, this is tend to be very hit and miss when
where you get approved or denied it comes to speaking with
for your borrowing request. borrowers, to wit, they don’t
call back all that often if you
Underwriting and the World of have leave a message with
Home Loans questions such as closing is in
two days and I need an answer!
Regardless of the type of home
loan you need and apply for, the In evaluating your loan
process works in a fairly uniform application, underwriters look at
manner. First, you access your a number of things. The first is
needs. Next, you apply for the collateral, to wit, is the home
loan. The loan is then submitted free and clear of liens and is it
to underwriting. If you are actually appraised at a number
approved, the loan is processed appropriate for the loan amount
and off you go to closing for you being requested. The second issue
new home. While this may all is whether you, the borrower,
sound fairly straightforward, have the ability to pay back the
just what happens during the loan on a monthly basis and over
underwriting process? Here is the the term of the repayment period.
answer to the grand mystery. The third issue is loosely known
as your credit score and combines
Underwriters are employees with a issues such as your FICO score,
lender that are charged with debt to income rations, patterns
making the big decision. In of repayments on other debts and
short, this is where the buck so on. If you can meet the lender
stops on approval and rejection guidelines for these three areas,
you are usually in fairly good income. Housing expenses include
shape when it comes to being the mortgage payment, real estate
approved. That being said, there taxes, insurance and so on. An
are other areas that are also underwriter is typically looking
used in the evaluation that can for a ration of thirty-three
sink you. percent or less. If you are above
this percentage, the underwriter
While the above three issues are will probably reject the loan
dominant factors in the loan application.
evaluation process, underwriters
will look at other issues as At the end of the day,
well. Remember, the underwriter underwriting is the nitty gritty
is evaluating how big of a risk of any loan application. If you
you are given the fact a lot of meet the criteria of the
money is being loaned. One thing underwriter and lender, you are
an underwriter will always focus good as gold to get the loan. If
on is your front ratio. A front you do not, it is time to look
ratio is simply a calculation of for a cheaper home and clean up
your total monthly housing your credit.
expenses divided by your gross
About the Author:
Dan Lewis is with http://www.gwhomeloans.com - mortgage brokers providing refinance and lending solutions.
Read more articles by:
Dave Lewis
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