What is a mortgage loan underwriter? - PowerPoint PPT Presentation


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What is a mortgage loan underwriter?


Mortgage lenders reduce their risk by having the underwriter examine a buyer’s financial history with a fine-tooth comb. Underwriters will be very careful to use sound judgement when analyzing loan applications since miscalculating a homebuyer’s ability to manage a loan could result in a foreclosure that could be very costly to the lender. – PowerPoint PPT presentation

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Title: What is a mortgage loan underwriter?

What is a Mortgage Loan Underwriter?
  • Dunhill Homes

There are a variety of professionals who become
involved in a homebuyers quest to purchase a new
home.  From lenders to Realtors to homebuilders
to insurance representativesthe amount of
knowledge and expertise wrapped up in a single
home-purchase is remarkably impressive.  Included
in the mix is another personality, so to speak,
who plays a major role in whether or not a
homebuyer will receive the loan they are hoping
for and that person would be the mortgage loan
The Four Cs
Credit  Underwriters will look at your credit
score and the higher the score the better it is
for the borrower since it will reflect lower-risk
probability.  Underwriters want to determine how
you have handled and managed repaying past
bills.  Ones credit history combined with other
factors will present a prediction of how
earnestly a borrower will repay a
loan. Capacity  Underwriters will look at a
variety of financial indicators and establish a
debt-to-income ratio.  In a very simplified
nutshell, this involves a percentage that is
achieved by comparing a borrowers debt to the
borrowers income.  Ones total, minimum monthly
debt expense is divided by ones gross (before
taxes) monthly income.  If the percentage is less
than 36, a borrower stands a good chance for
securing a loan, although some lenders will allow
higher percentages, depending on circumstances. 
The lower the percentage, the stronger the income
ratio will be and that can result in lower
interest rates.
The Four Cs Cont
Cash  Underwriters will look at the amount of
cold cash you are able to offer as a
down-payment and the more cash on hand, the
healthier your loan application will appear. 
It will also indicate dogged determination to
have the wherewithal to have set money aside for
a prolonged period of time.  Additionally, the
more cash you have on hand after closing will
greatly help you to be perceived as lower risk
and further increase your chances for a
loan. Collateral  Underwriters will look at the
appraised value of the home one wishes to buy.  A
number of factors will go into the homes
appraisal and the bottom line is this  if the
homebuyers were to default on the loan, will the
home have appropriate and sufficient value to
repay the loan?  Underwriters will make sure the
loan amount does not exceed the propertys value.
  • Thank you

Mortgage loan underwriters assess risk to not
only protect the lender but to protect the
borrower from possibly over-extending himself. 
You may have questions concerning underwriting or
any other real-estate-related issues.  At Dunhill
Homes, we team with experts with many years of
experience regarding mortgage loans and we are
here to help.  Just give us a call today and we
will be happy to connect you with one of our
mortgage experts! - See more at
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