Part II (of 3): 1003 - Deal Maker or Breaker.

Written by:
Angelina Johnson,
NAMP Volunteer Writer

Part II (of 3): 1003 - Deal Maker or Breaker.

What underwriters look for. Items that may seem 'just information' maybe crucial to an underwriter. The following are examples of such:

-age

-# of dependents

-residence history

-monthly income

-liquid assets

-current and proposed monthly payment

If a 1003 is missing one or two information, the scenario of the file loses credibility. A stated income file, for example, the underwriter looks at the borrower's age then determine if it make sense for him to be making the amount of income stated in his line of work. If it is questionable, they look further and see how much assets he has. General rule of thumb, underwriters like to see assets being 3x of income ( e.g. for a 6,000 per month income, an 18,000 liquid asset will make sense). Note: assets may include CDs and money market, stocks, bonds, 401K, etc.

# of dependents. This info is used to determine if the # of people intending to occupy the subject can be sustained by its size. In saying so, if a borrower has 3 dependents and are purchasing an owner occupied 2 bedroom 1,000sqft condo, it is conceivable to think the scenario make sense for a first time homebuyer but not someone with 2 or more properties or if the subject is in a prime neighborhood with all the available amenities and creature comforts.

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About the Writer. As one of NAMP's volunteer writers, Angelina Johnson is currently a NAMP member in good standing and has applied for her CMLP status with NAMP. Email: angelina@mortgageprocessor.org