What is the first step in the loan processing phase?
The initial step in loan processing is gathering and reviewing the borrower's documentation.
What is the purpose of a credit report in underwriting?
A credit report helps lenders assess a borrower’s creditworthiness and financial responsibility.
What role does an underwriter play in mortgage lending?
The underwriter evaluates loan files to ensure they meet lender and regulatory guidelines.
Why is debt-to-income (DTI) ratio important in underwriting?
DTI helps determine a borrower’s ability to manage monthly payments and repay debt.
What document provides the borrower’s final loan terms and costs?
The Closing Disclosure details final loan terms, projected payments, and closing costs.
What is loan pre-approval based on?
Pre-approval is based on a thorough review of credit, income, and asset documentation.
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Which party typically orders the home appraisal?
The lender orders the appraisal to verify the value of the property for the mortgage loan.
What is a conditional loan approval?
Conditional approval is granted when the underwriter agrees to approve the loan if certain conditions are met.
What is the purpose of verifying assets during loan processing?
Asset verification confirms that the borrower has sufficient funds for down payment and closing costs.