Qualifying Borrowers

Question 1

Back-End Ratio

Answer 1

A loan-qualifying ratio based on total living expenses

Question 2

Bankruptcy

Answer 2

A legal process wherein one is declared bankrupt and the estate of the bankrupt is managed under court supervision for the creditor’s benefit

Question 3

Capacity

Answer 3

The ability to pay a debt or loan being contemplated

Question 4

Character

Answer 4

The desire or willingness to pay a debt or loan being contemplated

Question 5

Collateral

Answer 5

The security pledged for the payment of a loan

Question 6

Income Ratio

Answer 6

A ratio used to qualify borrowers for a mortgage loan that is computed by dividing the monthly mortgage payments by monthly gross income

Question 7

Verification of Deposit (VOD)

Answer 7

The confirmation to the lender by the borrower’s bank of the amounts on deposit

Question 8

Verification of Employment (VOE)

Answer 8

Confirmation to the lender by the borrower’s employer of employment information