How Savings Institute Bank & Trust Company Makes Loan Decisions

Down Payment Verification

The documentation for each mortgage file must verify sufficient cash or other equity to meet the borrower funds required, including:

  • Down payment
  • Pre-paid/ Escrow items
  • Closing costs
  • Financing costs

A Verification of Deposit form or 2 most recent complete bank statements can be used to verify account and balance. Any account that was opened within 90 days of verification, or has a balance that is significantly greater (large deposits) than the previously shown balance, must have reliable documentation that the funds were not borrowed. Any down payment less than 20% will require Private Mortgage Insurance or be insured by a government agency, such as FHA , VA or Rural Development.


A two year credit history with a minimum of three credit accounts showing. Alternate documentation for a credit history maybe acceptable. All late payments over 30 days past the due date will be reviewed as part of the credit decision. Adverse credit may require an explanation. All collections, garnishment action or judgments must be paid, explained and have occurred more than two years ago

Job Stability and Income

Jobs are verified for a two year period. A job change is acceptable provided it was to improve income or take advantage of a promotion. Any gaps in employment must be explained in writing. Self-employed borrowers must have a two year history in business and provide federal business tax returns for the past two years. The bank will use the income declared on tax returns to calculate the ability to repay the debt. Income from employment must be of a reliable nature. Overtime income may be used depending on its probability of continuance.


The bank uses certain ratios to determine a borrower’s debt as a percentage of a borrower’s income. Housing debt is the monthly mortgage payment, real estate tax payment and homeowner’s insurance. Total debt is your monthly housing debt and all other payments such as credit cards, car loan payments, leases, alimony, child support and student loan payments even if not in repayment. Installment loans with less than 10 remaining payments are not included when the bank calculates debt ratios.

Ratios are calculated by dividing your monthly debt by your gross monthly income. General ratios are as follows:

28% of gross monthly income for housing debt and
36% of gross monthly income for total debt.

Automated Underwriting

First mortgage loan requests at SIB&T are run through an automated underwriting system (“AUS”). The system used at SIB&T is called Desktop Underwriter. This process greatly enhances the process of underwriting loans, has improved turnaround time, in some cases eliminated excess documentation and overall has improved the quantity and quality of approvals.