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Final Loan Approval
For final approval, the underwriter will review the processed loan application, all documentation and verifications, and either approve, deny, or suspend your application. At Sue Baxter, of the applications that go to underwriting, over 90% are approved. The underwriting process only takes several days.
In the event that you are not approved, Sue Baxter will immediately seek other underwriters willing to finance your mortgage and you will not need to start the process over again (see Services for more detail).
The types of information underwriters will examine and consider includes:
- Total Debt Ration: This is the percent of your income required to pay all your monthly bills including your "new" house payment, car loans, credit cards, etc.
- Credit History: How have you repaid prior loans, credit cards, etc.
- Housing Ratio: The amount of your gross monthly income it takes to pay your mortgage, including taxes and insurance. Generally, this figure should not exceed 33% for the Prime market.
- Loan-To-Value: the amount of lien placed on the house in relation to the value of the house, i.e., how much of the value of the property is being financed. A 100,000.00 property with a $80,000.00 loan would have an 80% loan-to-value.
- Cash Reserves: How much money you will have left over "in the bank" after you purchase your property. This is an important consideration as there are always unforeseen expenses. Usually about 2 months of mortgage payments of "extra cash" is required.
If you have chosen to get pre-approval before purchasing your property, underwriting can occur before the property appraisal and title search are complete and final approval will be only dependent on these conditions being met.
Once your loan has been approved and accepted by an underwriter, you are at the end of the road. You only need now to get to the closing where your loan will be actually funded.
If you have any questions related to Step #7 or any other aspect of the loan process, please contact us. Our loan consultants are here to answer your questions, whether they be general, specific, or because your confused. Because at Sue Baxter that's what we do best: we add a personal touch to the impersonal electronic age.
Continue on to Step #8
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