IPAC (Income, Property, Assets, Credit)
The four pillars of mortgage underwriting, every loan approval comes down to verifying these four categories.
Mortgage underwriters organize their review around IPAC because every loan decision rests on these four legs: can the borrower's documented income support the payment, does the property's value and condition justify the loan, are there sufficient assets to close and maintain reserves, and does the credit history show willingness to repay?
A weakness in one area can sometimes be offset by strength in another, strong credit and large reserves can sometimes carry a thin income file, for example. But a serious failure in any one of the four is usually fatal to the approval.
Knowing the IPAC framework helps borrowers prep efficiently: gather two years of W-2s and tax returns for income, get the home appraised cleanly for property, document every account showing required cash for assets, and avoid new credit inquiries or balances during the process for credit.
Related terms
Other terms you'll see alongside IPAC
The lender's formal review of a loan application to confirm it meets program guidelines and is acceptable to fund.
The percentage of your gross monthly income that goes toward debt payments, including the proposed new mortgage.
A three-digit number summarizing your credit history, used by lenders as a primary risk metric.
Liquid funds the borrower must have available after closing, measured in months of full PITI payment.
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