What is 'underwriting' in the mortgage lending process?
Why The lender's process of evaluating a loan application to determine the borrower's creditworthiness and loan risk Is Correct
Answer B: The lender's process of evaluating a loan application to determine the borrower's creditworthiness and loan risk
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
People Also Study
Related Delaware Questions
- A Delaware property is appraised at $310,000. The lender will loan 80% of appraised value. What is the maximum loan amount?Finance
- What is the debt-to-income ratio for a Delaware borrower with $1,850 housing payment, $350 car payment, $250 student loan payment, and $6,500 gross monthly income?Real Estate Math
- What is 'underwriting' in Delaware mortgage lending?Finance
- What is a 'correspondent lender' versus a 'mortgage broker' in Delaware mortgage lending?Finance
- What is 'loan origination fee' in Delaware mortgage lending and how is it regulated?Finance
- In Delaware, a seller's agent who discovers a hidden defect that the seller denies knowing about should:Agency
- In Delaware, a transaction broker:Agency
- An agent's duty to the principal continues after closing regarding:Agency
Key Terms to Know
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →