Get Mortgage Underwriting Checklist Template 2020-2024

The factors that determine your credit score are called The Three C's of Credit - Character, Capital and Capacity. These are areas a creditor looks at prior to making a decision about whether to take you on as a borrower.

Standards may differ from lender to lender, but there are four core components — the four C's — that lender will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.

Don't make any balance transfers on your existing credit card balances. Any new account or balance transfer may slow your mortgage application process. Don't pay off any existing consumer credit accounts in full (e.g. credit cards, auto loans, etc.)

Your underwriter needs to know that you have enough income to cover your mortgage payments every month. To prove this, you need to provide three types of documents to verify your income: W-2s from the last 2 years, your two most recent bank statements and your two most recent pay stubs. Underwriting: What It Is And Why You Need It | Rocket Mortgage rocketmortgage.com https://.rocketmortgage.com › learn › what-is-under... rocketmortgage.com https://.rocketmortgage.com › learn › what-is-under...

The Three C's After the above documents (and possibly a few others) are gathered, an underwriter gets down to business. They evaluate credit and payment history, income and assets available for a down payment and categorize their findings as the Three C's: Capacity, Credit and Collateral.

Standards may differ from lender to lender, but there are four core components — the four C's — that lender will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.

You'll need to furnish a few different documents in lieu of W-2s: profit and loss sheets, K-1s, balance sheets, and your personal and business tax returns. Your underwriter will also check that your income matches the income you report and verify your employment situation with your employer.

The Three C's After the above documents (and possibly a few others) are gathered, an underwriter gets down to business. They evaluate credit and payment history, income and assets available for a down payment and categorize their findings as the Three C's: Capacity, Credit and Collateral.