Underwriting: Ratios, Credit & Equal Credit

Underwriters judge the three Cs — capacity, credit, collateral. Capacity is measured by ratios: the housing (front-end) ratio compares PITI to gross monthly income; the total debt (back-end) ratio adds recurring debts — conventional benchmarks hover near 28/36, with flexibility for strong files. Collateral is verified by appraisal; credit by score and history. ECOA (Reg B) bans credit discrimination on race, color, religion, national origin, sex, marital status, age, or public assistance — and lenders must give the specific reason for a denial. Loan officers may not steer applicants to worse products by protected class.