Securing a mortgage involves navigating a complex process, and at the heart of it is the underwriting stage. As your dedicated real estate partners, The Garza Home Team is here to demystify this crucial step, focusing on the 3 C’s of mortgage underwriting: Capacity, Credit, and Collateral.
Capacity: Evaluating Your Financial Strength
Capacity assesses your ability to repay a loan. The underwriter scrutinizes your monthly gross income versus your total monthly recurring debts, calculating the debt-to-income (DTI) ratio. This numerical figure is a key determinant of loan approval. Additionally, assets like bank statements, 401(k), and IRA accounts are considered, providing a comprehensive view of your financial capacity.
Credit: Unveiling Your Financial History
Credit history is a critical component. The underwriter delves into a combined credit report from Equifax, Experian, and TransUnion, examining how you’ve managed debt repayment in the past. This stage reveals the extent of credit you’ve undertaken, the terms involved, and any red flags that might impact your loan repayment ability. At The Garza Home Team, we guide you in navigating credit assessments to strengthen your mortgage application.
Collateral: Protecting the Investment
Collateral safeguards the lender’s interests in case of loan default. A home appraisal is ordered to ascertain the actual value of your property, going beyond the loan amount. The loan-to-value ratio (LTV) is then determined, ensuring the lender has a clear picture of the property’s value. The Garza Home Team supports you in this process, ensuring your property aligns with the lender’s expectations.
Ready to start your homeownership journey? Connect with The Garza Home Team at RE/MAX North San Antonio – where expertise meets excellence in real estate. Let’s turn your homeownership dreams into a reality!
