Next is a question on the user’s foreclosure history. Again, there are five possible responses, ranging from no foreclosures to one completed more than five years ago.
Finally, the user inputs their current FICO score.
No online calculator offers a perfect prediction of what will happen to every loan application. But this one incorporates the latest underwriting rules from Fannie Mae, Freddie Mac and the Federal Housing Administration, three organizations that supply or insure most mortgages issued today.
Guttentag notes that even if the calculator shows the applicant should qualify for a loan, other factors could get in the way. A lender, for example, may not feel that the applicant has adequate income documentation. The lender may use a different source for the credit score, resulting in a lower figure. Or a specific lender might have tougher payment-to-income ratios than those used by Fannie, Freddie and FHA.
Still, more knowledge is always better than less. Anyone planning to apply for a mortgage under today’s tight rules should spend a few minutes getting the most up-to-date insight into the prospects for being approved.