CRU Underwriting Decision-Making & Loan Approval

Question 1

What is the primary role of an underwriter in mortgage lending?

Accepted Answer

To evaluate risk and approve or deny loan applications

Answer

To sell mortgage products

Answer

To appraise property values

Answer

To set interest rates

Question 2

What is a key factor in underwriting decisions?

Accepted Answer

Credit history and score

Answer

Color of the home

Answer

Mortgage company logo

Answer

Type of car owned

Question 3

What document is commonly used to assess borrower income?

Accepted Answer

W-2 or tax returns

Answer

Utility bills

Answer

Car insurance

Answer

Home décor receipts

Question 4

What does a debt-to-income (DTI) ratio help determine?

Accepted Answer

Borrower's ability to repay debts

Answer

Appraisal value

Answer

Property taxes

Answer

Credit card rewards

Question 5

Which of the following is considered compensating factor in underwriting?

Accepted Answer

A strong credit history

Answer

A small home size

Answer

A recent job change

Answer

High DTI ratio

Question 6

What is the purpose of an appraisal in the underwriting process?

Accepted Answer

To determine property value for loan approval

Answer

To check furniture quality

Answer

To list neighborhood schools

Answer

To find local businesses

Question 7

Which condition may lead to loan denial during underwriting?

Accepted Answer

Low credit score

Answer

Living close to school

Answer

Owning a new car

Answer

Decorative landscaping

Question 8

What type of underwriting uses software algorithms?

Accepted Answer

Automated underwriting

Answer

Traditional underwriting

Answer

Manual appraisals

Answer

Oral interviews

Question 9

What does a loan approval typically require?

Accepted Answer

Verified income, creditworthiness, and acceptable appraisal

Answer

An application fee only

Answer

Home inspection report

Answer

Photos of the property