Finance
A Massachusetts mortgage lender uses an automated underwriting system (AUS) like Fannie Mae's Desktop Underwriter (DU) to:
ANegotiate mortgage rates directly with borrowers
BQuickly evaluate mortgage applications and provide risk assessments and preliminary approvals✓ Correct
CRegister loans with the Massachusetts Division of Banks
DCalculate the exact closing costs
Explanation
Automated underwriting systems (AUS) analyze loan application data and provide rapid risk assessments and underwriting decisions, streamlining the mortgage approval process for lenders.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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