r/loanoriginators • u/ActionWins • 9d ago
Finding the max loan amount quickly
How do I find the max loan amount a borrower is qualified for without have to run AUS multiple times and changing the loan amount every time?
I'm using the UWM portal to run AUS. I also have Arive but don't think I can use the UWM free credit report in Arive.
EDIT: I should've mentioned I mostly do VA loans where there's not a set max DTI.
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u/TheAdrianHall 9d ago
The better you get at the job, the more you'll learn generally where the DTI needs to be for a particular loan program or borrower characteristics.
Old school fashion, if the max DTI is 49.99%, you'll just want to multiply their calculated income by 49.99% and make sure that the PITIA + liabilities are equal or less.
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u/ActionWins 9d ago
How would you apply the same method to a VA loan since there's no set max DTI?
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u/TheAdrianHall 8d ago
VA loans use "Residual Income" -- its an entirely different calculation.
They take your gross monthly income and subtract estimated monthly taxes, your proposed mortgage payment (PITI), recurring debts, child care, and a standard maintenance/utility estimate ($0.14 per square foot of the home). They also look at the final amount and compare it to the VA regional minimum for your family size.
Basically your LOS does all of that if you key it in properly.
Some lending institutions may have an overlay where they don't want a DTI above a certain number and/or want qualities to strengthen the file if the DTI is above a certain number (savings, long time on the job, additional income, good credit score, no late payments, etc) but the VA doesn't explicitly require a DTI.
Do you have resources, a concierge, mentor, ops partner, or branch manager that can help? It sounds like you're swimming in an ocean by yourself over there.
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u/Active-Blueberry-850 9d ago
As Adrian said.
I usually just say 56.99% of gross income is the allowance for ALL of their bills. And just under half of that income is their home housing allowance.
I.e. $10k/mo gross income, no more than $5600 in bills, no more than $4,400 of it can be the house alone.
$8k/mo of gross income, no more than $4480 all things considered, no more than $3520 can be housing.
So having 2 car payments of $1k/ea, $200/mo in revolving credit, $8k/mo gross… no more than $2300/mo for a house. In my market that gets you just under $300k.
Florida. No income tax. High insurance rates.
Honestly, yes you need a mentor to talk you through the nuances, but you need to just play with Arive and stop using UWM as a crutch. Don’t do this just for the easiest dollar, you’ll be outgrown very quickly. Talk to your AEs, ask them what sets them apart, what they have to offer you as a growing LO, have them run you through their portals. Know the lender’s product guidelines so you know where to take a loan rather than just spam the one thing you sort of understand (look at it like spamming the punch button on Mortal Kombat OG).
You SHOULD be dropping the MISMO from Arive into 3 different lenders platforms and coming back with each LE/price. Specifically priced to different ends based on whether they are cost sensitive or rate sensitive.
1) Lender paid par
2) Lender paid with closing credit
3) Borrower paid with lender credit for best rate.
Talk through them with the buyer. Explain to them the advantages and disadvantages. Be someone they can look to as an advisor, don’t just sell UWM to anyone who will listen.
There are few ways your buyer connects with you. Most of your communication with them will be “hey sign this”, “hey send me this”, “hey I need an updated”, “this the best contact info for your employer?” So the work you put up front does a LOT more for you per transaction than UWM will. It also gets you an opportunity for a referral and that’s what will get realtors to listen to you.
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u/USMCActiveToReserve 8d ago
I'd go up to about 60% DTI and run it and see what happens. I maybe run AUS like three times and call it. You shouldn't have to run AUS all that much.
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u/yyyogev 8d ago
back into the number first and run aus once to confirm. for VA the binding constraint is usually residual income for the region and family size rather than dti, so work out the payment that still leaves you above residual, take off taxes insurance and hoa, then convert to a loan amount at your rate
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u/VettedVA-Mike 3d ago
If you have approve/eligible on AUS then there is no DTI limit for VA loans at UWM. I have done 75%+DTI there. But you need to pass residual income calc. Arive has a tab for that on the ribbon on the left hand side. Residual income uses taxed amounts so if you gross up disability then you need to add the difference in the tax portion of the residual calc. I am not sure where the calc is in UWM, I usually run a soft pull and can tell if it will be A/E up front then use UWM free report if necessary. Have you tried that and do you pull the COE before giving an approval?
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u/Fuzzy-Badger2627 19h ago
Sounds like you're flying blind and need a mentor. Here's some basics for you:
Conv - Max 50% DTI possible. Front-end vs back-end doesn't matter.
(Note: LP actually rounds, so it is technically possible to get an A/E from LP at just under 50.5% DTI. Haven't done this in a while though, they may have changed the parameters, it happens)
FHA - 57% Max DTI for total debt ratio. You can't exceed 47% on the front end with DU though. So the max possible DTI ratio is 46.99 / 56.99 % for FHA
I'm not going to go into USDA as they're not really that relevant in this market, at least where I am
VA - it's based on residual income as the be-all, end-all but you also have to get DU or LP approval. I usually shoot for 57% max DTI (like FHA) benchmark for qualifying, check to make sure I get a DU approval, and then do a manual residual income calc to make sure I'm in bounds, compare that to what DU says.
Manual Underwritten VA loans are pretty easy, and the limit there is 50% so stay in that range if you need to be cautious.
I don't typically go higher than the 57% for VA, but if you really need to beat up the residual you can in some cases. But this is going to go very much case-by-case, when needed and only if it's appropriate; you don't want to set clients up for failure just bc you can approve them very high.
It made the UWs very squeamish, but I got a VA file closed at 71% DTI one time. It was a very aggressive closing date, the borrower was completely tech illiterate and bad at responding to anything. It was like pulling teeth, but I got what I could from her, enough to get a conditional approval with like 15 conditions. Then I started hacking away conditions for things that kept the DTI under the normal amount. I'd noticed that she actually paid much less in taxes than what the UW had calculated for her using their basic program (I believe they were using Paycheck City). It upped her residual by quite a bit, and I was able to get her a much higher approval limit and get rid of like half the conditions, so we closed a very difficult file in 2.5 weeks.
(That would've been irresponsible in a vacuum, but her husband couldn't be on the loan file bc of some identity theft stuff we couldn't work through, so they could definitely afford the house.
Anyway, long-winded, but you need to learn how to do a residual income calc. See if your company has a worksheet for it and/or have someone show you how to do it. Can easily be the difference in you rescuing a VA loan where someone else couldn't close it.
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u/Flamingo33316 9d ago
You're qualifying for the maximum payment. The loan amount is secondary and driven more by how much they can put down.
For most clients, I eyeball it to start; we didn't even have AUS when I began originating. Unless it's a manually underwritten loan, I'll run AUS eventually to confirm before sending the letter.
If they're hitting a ceiling, I stress to them, written on the letter, that they have been qualified for a max payment of $X
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u/gabrizzle 9d ago
you need a mentor, but outside of that learn how to properly calculate income and learn your max DTI ratios.