First-time home buyers can often be overwhelmed by the mortgage application process. Academy Mortgage aims to make that process slightly easier for buyers. Through a series of videos, Academy Mortgage will answer the top 10 questions buyers reported having about mortgages in a new national study.

One of the most common questions asked by prospective home buyers is “What do underwriters look at when they’re reviewing a mortgage application?” According to the experts at Academy Mortgage, underwriters look at four major components during as they review each application. At Academy Mortgage, they use an acronym to describe these components – PAIL. PAIL stands for property, assets income and liability.

Property is easy to understand, especially when you’re buying a new home. It refers to the new home itself and the land it is located on, which are generally both in great condition since it is new. Assets refer to your financial properties, or where your money is coming from. Underwriters look at your income to find out how much money you make and to determine if you can afford the mortgage payment. Finally, they look at liability in order to see what debts you are currently liable for. This includes a review of your credit history and the amount of debt that you currently have.