A-paper
Encyclopedia
A-paper is a term to describe a mortgage loan
for which the asset and borrower meet the following criteria:
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
for which the asset and borrower meet the following criteria:
- In the United States, the borrower has a credit scoreCredit score (United States)A credit score in the United States is a number representing the creditworthiness of a person, the likelihood that person will pay his or her debts....
of 680 or higher - The borrower fully documents his income and assets
- The borrower's debt to income ratioDebt-to-income ratioA debt-to-income ratio is the percentage of a consumer's monthly gross income that goes toward paying debts. A debt-to-income ratio (often abbreviated DTI) is the percentage of a consumer's monthly gross income that goes toward paying debts. A debt-to-income ratio (often abbreviated DTI) is the...
does not exceed 35% - The borrower retains 2 months of mortgage payments in reserves after closing
- The borrower injects at least 20% equity