Mortgage Loan Underwriting
Michigan Mortgage Underwriting
Underwriting
guidelines determine what home loan options you have for your type of
financial needs. Also understand your loan qualifications, based on four major
factors.
-
Credit Report
- Debt-to- Income Ratios (DTI)
- Down payment or equity
- Compensating factors
After completing your loan application,
disclosures, gathering all the
supporting documents from you, receiving the
appraisal, and title work your loan
is ready to be underwritten. A trained professional (underwriter) reviews all
the information provided by the broker. I'm here to help you understand
the underwriting guidelines that will determine what your mortgage loan options
are for purchasing or
refinancing your home.
You will understand mortgage loan
qualification based on the four major factors
a lender considers; your credit history, income vs. debt, down payment or
equity, and compensating factors. You will learn:
- What loans you do and do not qualify for and WHY
- The loan process including major Do's and Don'ts
- How to prepare in advance to get approved
-
Credit repair and how to increase your credit score
The most important section here is
How to Select the
professionals* you will be doing business with. I cannot emphasize this enough.
Even if you know NOTHING…, the right Mortgage Broker, Real Estate Agent, Closing
Company, Appraiser, Home Inspector and Moving Company will get you into a home This is what makes the mortgage business seem so inconsistent. You have read
the basic guidelines and normally they are followed to the letter, but all
customer portfolios are different and nothing is so black and white it is set in
stone. If you have three very strong factors they can compensate for one area
where you may fall outside the guidelines. One very good example of this is
Debt to Income Ratios.
Most loans today are sent through automated underwriting programs that grade
your application and approve or don't approve your loan. (Desk Top Underwriter,
Loan Prospector, Desk Top Originator) A good example is a couple who had a 60%
total debt to income ratio and were approved for a
$200,000 Fannie Mae Loan. Fannie Mae back ratio max is 36%. Their compensating
factors were: Each had 18 years on the job, Each had retirement accounts over
$150,000, and both had credit scores over 750. Without those three factors they
would have been turned down for the loan. So, nothing is really set in
stone. Compensating factors can be any of the
following provided they are very strong. Ratios, credit score, equity/down
payment, assets, and time on the job. You can see why it is very important that you get an experienced loan officer Here are the factors in every Loan or the 4 C's The collateral is the most important factor to
approve a loan; Capacity to pay the loan and the willingness to pay the loan is second. Credit is determined by your FICO scores, your mortgage or rent history, and last your unsecured debts or consumer debts. |
