1. Collateral (property characteristics) – check whether that property meets the criteria (number of units, condition, location, etc) of the lender you intend to use
2. Amount and source of down payment and reserves – lenders like to see their borrowers put at least some of their own cash into their properties at the time they buy them and enough reserve to cover 2 to 3 months of mortgage payments
3. Capacity (monthly income) – monthly income from employment and other sources, as well as the expected NOI of the property you’re financing
4. Credit history (creditability) – good credit expands your possibilities
5. Character and competency – education level, career advancement potential, job stability, dependability, etc
6. Compensating factors – persuade a lender to approve your loan, emphasize your positives and play down or explain away negatives
^McLean, Andrew, & Eldred, Gary W. Investing in Real Estate. 5th ed. New Jersey: John Wiley & Sons, Inc, 2006
09 July 2010
6 Mortgage Underwriting Standards
To determine your request for a mortgage, lenders apply a variety of underwriting guidelines
