When a home buyer applies for a home loan, the application is accepted or rejected based on criteria that prove that the applicant is a financially stable and reliable candidate to make their payments on time. Requirements and qualifications vary based on each home loan program. An underwriter is a hired vendor responsible for reviewing each application to assess the risk of lending to a borrower. This process not only protects the lender from potential default but also protects the borrower from entering a loan that they cannot afford. During their assessment, they take three factors into consideration. Each factor is weighted differently based on the type of the home loan. The Underwriting Process – The 3 C’s To fully assess the risk of a borrower, underwriters review a borrower’s credit, capacity, and collateral. Based on their assessment, they determine… Read More
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