Ask an expert: An Underwriter
When going through the process of getting approved for mortgage financing, the most stressful and seemingly longest phase is when the loan is in the hands of an underwriter. This is the final step prior to the loan being approved or denied—ahhh! Talk about pressure! But by understanding what an underwriter is doing and some common yet avoidable things that hold up getting a “clear to close” your mind may be put at ease. So, we will ask an expert, one of our veteran Underwriters, Dawn Rhoden, what she wishes more people knew and what tips she wants to share!
Meet our Expert:
What is it exactly that an underwriter does?
We evaluate the information provided about the borrower and property compared to the loan requirements. From there it is determined if the loan is approved, declined, or needs more documentation.
What information plays the biggest role in getting approved?
It is a mix of the different components. We are evaluating borrowers to see if they are capable of and likely to pay back the balance of the loan. At the same time, we confirm that the property is priced correctly and is a sound investment; this not only protects the borrower but also ensures that the value of the property is at least equal to the amount of money we are lending. Also, each type of loan has requirements of its own; for example, there may be specific property requirements that must be met or verified in order to give the borrower approval.
What are things that could hold up the process of getting a mortgage when a loan ends up on an underwriter's desk?
By the time the loan file makes it to an underwriter’s desk the borrower has already submitted a lot of documentation and invested a lot of time into this endeavor of qualifying for financing but often we need additional documents or clarifications of existing ones. I know that this can be frustrating to a borrower and can feel very overwhelming. However, the quicker the borrower can get any requested items to us, the quicker we can get a decision made on their loan.
Is there anything that can be done on the front end to avoid these added clarifications/ documentation needs?
There will likely always be something more needed by an underwriter but there are a few common things that cause hold ups in the process which could be easily avoided by the borrower, realtor, or mortgage banker; some of them include:
- If the borrower is planning to use overtime, commissions, bonuses or anything other than a straightforward salary or hourly rate then we need a full verification of employment. So be sure that the mortgage banker and realtor are aware that this is the case.
- The utilities must be on, appliances need to be working, and any repairs must be noted (i.e. broken window’s, no flooring, etc.)
- Including personal property (pool tables, etc.) on the contract without saying it is “being left for the sellers’ convenience” can slow down this stage. Without that disclaimer, we may have to re-evaluate the appraised value of the property.
- Lastly, make sure the contract is fully executed and initialed everywhere it is supposed to be.
You see an underwriter’s job isn’t to determine their opinion of a borrower based on their gut instinct. Instead they ensure all the needed information is there and they assess it based on the requirements given to them. Hopefully having this additional knowledge about underwriting will help you to feel a bit more at ease! Maybe it will even help you move through the process quicker, knowing that you can have an impact on the turn around time. You can read more about how to avoid delays at other steps in the mortgage process here but if you have more questions, we are always here to answer them!