and has logged in. Make it easy, quick, and friendly for the applicant (so they actually complete the application and don't abandon) Get a current credit report Prequalify (auto-decision) the application and return a quick response to the applicant. Typically this would be approved subject to stipulations, referred to the financial institution, declined (many financial institutions (FIs) shy away from this preferring to refer any application that can't be automatically pre-approved.) Processing Decisions and credit risk The mortgage business consists of a few people: the borrower, the lender, and sometimes the mortgage broker. The people that originate the loans are usually the mortgage broker or the lender. Depending if the borrower has credit worthiness, then he/she can be qualified for a loan. The norm qualifying FICO score is not a static number. Lender guidelines and mitigating factors determine this number. Recent changes in the market and industry have made stated-income and stated-asset loans a thing of the past and full income and asset documentation is now required from the majority of Fannie Mae and Freddie Mac backed mortgage securities. Not only does one's credit score affect their qualification, the fact of the matter also lies in the question, "Can I (the borrower) afford this mortgage?" In most cases the borrower can afford their mortgage. However, some borrowers seek to incorporate their unsecured debt into their mortgage (secured debt). They seek to pay off the debt that is outstanding in amount. These debts are called "liabilities", these liabilities are calculated into a ratio that lenders use to calculate risk. This ratio is called the "debt-to-income ratio" (DTI). If the borrower has excessive debt that he/she wishes to pay off, and that ratio from those debts exceeds a limit of DTI, then the borrower has to either pay off a few debts in a later time and pay off just the outstanding debt. When the borrower refinances his/her loan, they can pay off the remainder of the debt. Example: If the borrower owes $1,500 in credit card payments and has a gross monthly income of $3,000, his DTI ratio would be 50%. But if the borrower owes $1,500 in payments and has a gross monthly income of $2,000, his DTI ratio would be 75%. Both a 50% and 75% DTI ratio would be too high for most lenders, as a DTI ratio of 43% is generally the cutoff for conventional mortgages. All