Underwriting Systems: Desktop Underwriter (DU) & Loan Prospector (LP)

DU and LP are similar in what they do: they are both Automated Underwrite System (AUS) used to underwrite borrower’s loans. If your loan is approved by Fannie Mae’s DU, Freddie Mac’s LP will also approve it. In some cases with respect to borrower’s conditions: Debt-To-Income (DTI), FICO scores, Down Payment, one system will approve while the other won’t.

No Closing Cost Loan
There is always Closing Cost. There’s no such thing as free lunch. So, why is there a “no-closing” cost home loan? It’s very simple: The cost is transferred in some way.

The fundamental thing about interest rate is that you can have any interest rates you want as long as you buy it: Buy down the rate, or get money back when accepting higher interest rate. Think of interest rate as in Golf. Rate at “Par” and borrowers pays nothing for such rate except standard Closing cost: Escrow, Lender’s Title Insurance, Underwriting, and other non-interest related loan cost.

“Par” means the best interest rate borrowers can get base on their FICO score, Down Payments, and Purchasing condition. Rate above “Par” is when borrowers are willing to get higher interest rate in return for not paying closing cost. Rate below “Par,” and they are buying down the rate.

The cost of getting a home loan can be zero if borrower is willing to get a higher interest rate in exchange for lender coverage of borrower’s closing cost. Another way is to increase the borrowing amount to cover the loan’s closing cost.

At Virchu Financial & Investment, we want to make sure borrowers know exactly what they are getting themselves into. Not just with a sales pitch.

VIRCHU Financial & Investment is here to provide you with more information, answer any questions you may have and make your homeownership dream a reality!

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