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LESSON 14: WHAT LENDERS WILL ASK AND HOW THEIR UNDERWRITERS
WILL EVALUATE YOUR ANSWERS
(continued from previous page)
Depending on your answers
to the lender's questions, your chances of approval can vary significantly.
Here are some loan and borrower characteristics, arranged by category,
that can work for or against an applicant:
Keep in mind one very important point -- none of these
things necessarily preclude someone from getting a conforming
loan! Each "minus" just raises the risk profile of
a borrower. Furthermore, lenders allow strength in one part of a
borrower's file to offset weakness in another. Someone could be
self-employed with little money in the bank and have a total debt-to-income
ratio of 45 percent, but still get approved for a mortgage if he
or she had a very high credit score.
Even those who are turned down for conventional
loans have alternatives, which we'll discuss a little later.
You need to
ask the lender questions, too. Be sure to ask more than
"What's the rate?" Find out about lender fees,
rate locks and more -- do your homework.
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