When underwriting a loan, lenders focus on three areas: which are they?

• A. Credit Score, Loan Term, Closing Costs
• B. Seller's motivation, Real estate market, HOA rules
• C. Appraiser's name, Lender's address, Title type
• D. Borrower, Property, Location of Property

Answer: (D)

Underwriting looks at three areas: the Borrower, the Property, and the Location of the Property. The Borrower is tested for creditworthiness and ability to repay—past credit history, stable income, employment stability, and existing debt and assets. The Property is evaluated as collateral—the appraised value relative to the loan amount, plus its condition, type, and whether it meets the lender’s guidelines for the loan. The Location of the Property matters because neighborhood factors, school quality, crime, taxes, insurance considerations (like flood or hazard risks), and local market conditions influence future value and how easy it is to sell or insure. By examining these three areas, lenders assess overall risk: can the borrower repay, is the property worth the loan amount, and does the location support long-term value and resale potential.