Loan Underwriting: Definition, Process & Purpose


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Which of the following is NOT one of the three credit reporting bureaus?

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1. What can a borrower do if the underwriter reports a high loan-to-value ratio?

2. Which of the following affects a buyer's debt-to-income ratio?

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About This Quiz & Worksheet

Through this quiz and worksheet, you will be asked about topics which include the loan- to-value ratio and calculating the debt-to-income ratio of a borrower.

Quiz & Worksheet Goals

You will also test what you know about:

  • Credit reporting bureaus
  • What affects a buyer's debt-to-income ratio
  • The purpose of collateral

Skills Practiced

  • Information recall - access the knowledge you've gained regarding the three credit reporting bureaus
  • Knowledge application - use your knowledge to answer questions regarding what affects a buyer's debt-to-income ratio when applying for a loan
  • Interpreting information - verify you can read information regarding the purpose of collateral in loan underwriting and interpret it correctly

Additional Learning

The lesson entitled Loan Underwriting: Definition, Process & Purpose will help you learn more about the process of qualifying for a loan. Some topics this lesson will discuss include:

  • The debt to income ratio
  • A definition of loan underwriting
  • What collateral is
  • The meaning of credit and capacity