Mortgage Info for Homes and Small Business Financing

The Four Pillars of Mortgage Underwriting

You want to borrow money to buy a new house or refinance your current loan.  What are the criteria that every lender uses to judge your ability to get a loan request approved?

Imagine if you were lending someone your own money.  Not a family member.  Not a friend.  Someone you didn’t know.  What would be your concerns?  Imagine the questions you would want answered.

new home checklist

There are four things every lender’s underwriter will be asking and thinking about as they review your loan application request:

How much cash do you have to close the transaction and where did it come from?

Is the appraisal valid because the property is collateral for your loan?

Is your income adequate and stable enough to have the ability to repay the loan?

And does your prior credit history indicate that you are a good risk?

Should you fall short on any one of these criteria your chances of obtaining the mortgage desired is diminished.

These are the four main criteria.  There are other criteria that are less obvious.  Does the borrower rely on part-time income?  Bonuses?  Commissions?  Has the borrower remained in the same line of work with a two year history?  Were there large deposits that can not be accounted for in the bank statement?  Where did they come from?  Are the comparables in the appraisal adequate to support the value or does the appraiser need to “clarify”?  Do recent credit inquiries indicate the need to borrow additional money?  Has the borrower created new liabilities which are not yet reflected on the credit report?

These are all questions that any good underwriter will ask themselves as they ponder your loan request.  And by no means do they represent all the questions that will be asked about your particular loan application.  Each request is unique and should be reviewed as such.

My responsibility to you is to present your information in the most favorable light possible and get you a loan commitment.

Photo:   alancleaver_2000

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