Does your small company provide home loans? Do you need eligible and competent mortgage underwriters? Now there is a very simple way of finding highly competent and experienced staff without advertising vacant positions in your company. It is none other than outsourcing. Through outsourcing you can buy any amount of mortgage underwriting services demanded by your company. There are big mortgage processing companies in the US that can sell you high quality services for affordable rates. They will have a contract that stipulates their terms of service. Your obligation is to sign this contract only if it is favorable. Mortgage underwriting services entail four main areas of delivery. Three areas are described briefly as shown below.
Income and Debt analysis – Underwriters call this capacity in short. It entails a thorough and clever analysis of a loan applicant’s total income to their projected mortgage size. There are two types of ratios that must be computed to compare a borrower’s income to their debt size. The first one is called the housing ratio or front-end-ratio. It takes into consideration many factors including principle, interest and homeowners insurance. When applicable, providers of mortgage underwriting services could consider mortgage insurance and natural disaster insurance as well.
The housing ratio is the percentage of proposed mortgage divided by monthly income before taxation. The required result should be twenty-eight percent or less for approval to be granted. Even so, the back-end-ratio is also considered before approval of loan file is given. Sellers of mortgage underwriting services add the front-end-ratio to any recurring debt obligations that a loan applicant has. Their credit report will show recurring debt obligations. These could be car loans, credit card debts, and so on. This ratio does not include the small debts a home buyer causes every day. The best result for back-end-ratio computation is usually forty percent or less. Even so, there are some lenders who approve a home loan when the back-end-ratio is more than forty percent. In short, underwriters, on behalf of lenders, tackle debt cases in a very unique and intelligent manner.
Prediction of Future income – Vendors of mortgage underwriting services call this credit prediction. Underwriters perform statistics to determine a borrower’s future loan repayment likelihood. To be accurate, these experts review past financial history. Many factors are considered including payment history, total home loan debt vs. outstanding installment debt and so on. After their evaluation is over, each loan applicant’s file is given a credit score. A higher credit score means a lower risk to the lender and vice versa. If a loan applicant gets a high credit score they get favorable loan terms as well.
Cash Review – This is also part of mortgage underwriting services. It is one of the four C’S of the underwriting process. It is called cash in short. The main work done here is the review of the asset being mortgaged after the home buyer has taken possession of it. There are two main aspects of cash. These are cash in reserves and cash in the deal. Cash in reserves is the amount that a home buyer has after their file is closed. The higher the amount a borrower has in reserve the lower their chances of defaulting. Cash in the deal refers to the down payment. If a home buyer wants to make a huge down payment, it means they are not afraid of putting their money at risk. So they get loan terms from the outsourced dealer of mortgage underwriting services.