Lending Process

Question 0

Credit score

Answer 0

Applicants payment and credit history

Question 1

Assessing buyer price range

Answer 1

1) stable income
2) net worth
3) credit history

Question 2

Loan underwriter

Answer 2

Evaluates loan application to determine the desirability of loan

Question 3

Mortgage to income ratio

Or

Front end ratio
Housing to income ratio

Answer 3

Ratio of monthly house expense to gross monthly income

Can’t be more than 28% of gross monthly income

Question 4

Debt to service ratio

Or

Back end ratio
Debt to income ratio

Answer 4

Sum of total monthly debt payments in relationship to borrowers gross monthly income

Most can’t be more than 36% of borrowers monthly income

FHA debt to service 29% and debt to income 41%

Question 5

VA lending

Answer 5

No front end ratio

Back end ratio 41% gross monthly income

Question 6

Four steps to securing loan for purchase of real estate

Answer 6

1) applying for loan
2) analysis of the borrowers assets and liabilities
3) underwriting the loan
4) closing the loan

Question 7

Underwriter

Answer 7

Reviews loan and evaluates risk

Question 8

Loan origination fee

Answer 8

Covers administrative costs of making the loan and is percentage of the loan amount