Chapter 1
Virginia Real Estate Law & Agency
Course: Virginia Real Estate Exam Prep
Subject: Virginia State Salesperson Exam Prep
Chapter: Real Estate Finance
The "Four Cs" of Underwriting:Lenders evaluate borrowers on:
- Capacity: Ability to repay (DTI ratios).
- Credit: History of repaying debts (credit score, report).
- Collateral: The property's value (appraisal).
- Capital: Cash reserves for down payment and closing costs.
TRID - The Integrated Disclosure Rule:This rule created two key forms to simplify and clarify loan costs.
- Loan Estimate (LE): Provided within 3 business days of the loan application. It details the estimated loan terms, projected payments, and closing costs. These estimates are generally binding on the lender for 10 business days.
- Closing Disclosure (CD): Provided at least 3 business days before consummation (closing). It shows the final, actual terms and costs. The borrower has this time to review and compare it to the LE. If certain costs increase significantly, it may trigger a new 3-day waiting period.