Mortgage Underwriting Guidelines Fha Mortgage Guidelines Mortgage Loan Guidelines

Mortgage underwriting guidelines have dramatically tighten up since the collapse of the mortgage and real estate boom days. For example many sub-prime mortgage companies would utilized state income to inflate a mortgage applicants income qualifications. Those  type of mortgage underwriting guideline was called a “liar’s loan”. Many of the mortgages that have defaulted were stated income loans.

 Mortgage companies would be able to pick their favorite appraisal company to conduct either a drive by appraisal or an interior appraisal.  This relationship would benefit  both the appraisal company and the mortgage company.  A quick example would be that a  property would need To be valued at $300,000 in order to qualify for a mortgage loan of $285,000, then  the property would be appraised at the “right property value appraisal of $300,000 to meet underwriting Guidelines.

 Many the mortgage sources were either a sub prime mortgage, Freddie Mac, Fannie Mae, (FHA) Federal Housing Authority, (VA) home loans.  Now days you mortgages will be one  of the following (FHA), VA, Freddie Mac, or Fannie Mae mortgage loans.

 Credit FICO scores mortgage guidelines have also been tightened.  Under a sub prime mortgage underwriting guideline a person could be manually approved by the underwriters with a FICO score as low as 500. Of course that mortgage program required 20 percent down payment or higher.

Now the minimum FICO score for most mortgage programs starts around 620.  (FHA) minimum FICO score is 620.

 Underwriters will look at your Credit FICO scores as metric to measure how successful you will be in paying back your debt obligations. The higher your credit FICO score the lower your mortgage payment will be. The higher your credit FICO score the more likely you will see that your mortgage application will be approved.

 Underwriting guidelines look at the following factors on all mortgage applications. Your Credit history, the Loan to Value (LTV) as well as your income verification. Once all three Of those factors have been completed then you will be approved for a mortgage application. An appropriate analogy would be that of a three legged foot stool.   Once all three legs are completed and are even then you can rest your feet in your new home.

Underwriting guidelines for a (FHA) home loan are very foregiving.  For example if you have a discharged bankruptcy that was cleared off at least 2 years prior to the date of your mortgage application you can still be considered for mortgage underwriting approval. If you have a prior mortgage foreclosure you would need to have that foreclosure be done prior to 3 years from The date of the mortgage application.  Of course your final mortgage payment will be much higher due to the bankruptcy and mortgage foreclosure.

 (PITI)  means principal, interest taxes, and insurance  (FHA) underwriting guidelines state that your (PITI) can not exceed 31 percent of your gross income. Your total debt income, credit cards, auto loans, personal loans, student loans can not exceed 43 percent of your gross income.

 With tightening underwriting guidelines we are seeing less mortgage foreclosure delinquency rates. This will in turn stabilize the housing industry and bring the property values back up as well as begin to decrease the housing inventory on the real estate market.