The Underwriter will review and analyze the processed loan package and either approve, deny, or suspend your application for a loan. Our approval ratio exceeds 90% of applications that go to underwriting. In reaching a decision on your application the underwriter will take into consideration your income, credit, cash reserves and the property itself.

Terms and concepts you should know

·     “Housing Ratio,” is the percentage of your gross monthly income it takes to make your house payment including taxes and insurance. If you earn $4,500 and your house expense is $1,500, you have a 33% housing ratio (1,500 is one third of 4,500).

·     “Total Debt Ratio” is the percentage of your gross monthly income it takes to pay your house payment plus other monthly payments you make, like car payments, credit cards, student loans and so on.

·     “Cash Reserves” is money left in the bank after the loan funds. Cash in the bank is a very important factor - you have to have some after the loan closes just in case you run into unforeseen circumstances. The usual requirement is at least 2 months worth of house payments.

·     “Credit History” is the timeliness with which you’ve paid your bills in the past. Most important is the last two years.

·     “Loan-to-Value” - one of the most often used jargon terms.  To calculate LTV simply take what you owe on your home divided by what it is worth.   If you have a $100,000 house with a $90,000 loan you have a 90% loan-to-value.

The Pre-qualification is a general calculation based on your income and debts about how much of a loan you might be able to afford. It doesn’t mean that you’re approved for a loan - only that if your income and debts are as you state, you could qualify for a certain loan amount. Pre-approval, on the other hand, is exactly that - we run a credit report, verify your income, debts, and employment, and determine that you are, indeed, approved for a specific loan amount, subject only to property appraisal and no change in financial circumstances. To get pre-approved, just fill out an application, and put “pre-approval” where the application asks about property address, sales price, loan amount, etc”