This is a single-family/residential course.
A borrower's capacity to repay a mortgage loan is primarily measured by the applicant's employment and income stability. Proper calculation of qualifying income is key to arriving at an accurate set of housing ratios. Therefore, it is critical that an underwriter evaluates income and income sources in the appropriate manner, following income guidelines that are acceptable to the final loan investor.
In this course, stable, secondary, and seasonal income from employment will be discussed, along with variable sources of employed derived from overtime, bonus, and commissions. Documenting these income types and calculating qualifying income will be a main focus. The course also provides a basic overview of the more advanced underwriting income techniques used to analyze self-employment income. Income generated from sources other than employment must be verified only if it is needed to quality. Non-employment income, such as child support, alimony, pensions, and interest income will also be examined. Methods of determining continuity of this income will be reviewed. Toward the end of the course, techniques for underwriting rental income from the subject property will be discussed.
It is important to note that the concepts explained in this course form the foundation for sound underwriting. When a loan is run through an automated underwriting system (AUS) such as Fannie Mae's Desktop Underwriter® or Freddie Mac's Loan Product Advisor®, borrower eligibility and documentation requirements will differ as a result of the risk factors present within each individual transaction.
Stable Employment Income
Secondary and Seasonal Income
Variable Employment Income
Overtime and Bonus Income
Rental Income from Subject Property
Seat time approximately one (1) hour.