Question
  1. Steps in the underwriting process include all the following except:

    a.

    Investigate credit history

    b.

    Disburse funds

    c.

    Order an appraisal

    d.

    Verify income and employment

    e.

    All of the above are steps in the process

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Answer #1

b) Disburse funds

what is underwriting process?

underwriting is which is a process of taking financial risk for a fee. Commonly large financial institutions are act as underwriters. They will take the risk of the business for that they will get a payment called fee.

So lets discuss about the steps involved in underwriting.

1. Investing credit history - It means you should be to get prequalified for get a loan.Lender will closely analyse your financial stability and position.They will check your revenue and liabilities.So this prequalification will helps to understand which kind of mortgage we need.

2. verify of income and employment - This means we should be ready with our bank statements and the details of the tax which we paid and should be ready with the income statements.Then only the lender will give a preapproval letter.

3. Order and appraisal - if we like a house and would like to order it then the lender will scrutnize that whether the amount we offered is adequate for this property or not. It will be based on the condition about the house. The cost of appraisal is subject to change depending on several factors.

4.title search and title insurance - title check is very essential because lender dont want to lend house with legal issue. so close search is necessary. It should also focus on the insurance of the same.

5.underwriting decision - When underwriter reviewd our application then he can decide that whether to accept or deny your application by looking closely into it.

These are the steps included in the underwriting. So we can see disbursement of fund is not included in it.

THANK YOU.

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