1-407-575-5392
Menu

The Underwriter

NEXT
PREV
  Follow me: Wendy Morris on Twitter Wendy Morris on Facebook Wendy Morris on LinkedIn
Tue, Apr 08, 2014 at 6:00PM

The Underwriter: Unseen Approver of Your Mortgage

Once you have found a house you like, made an offer and been pre-approved for a mortgage, you might think you are home free. However, you still have an important hurdle to clear: Getting through the loan underwriting process.

Think of the underwriter as a gatekeeper. The underwriter won’t let you in the front door unless you can thoroughly demonstrate your creditworthiness.

The Real Estate Detectives

Underwriters are like real estate detectives. It’s their job to make sure you have represented yourself and your finances truthfully, and that you haven’t made any false or misleading claims on your loan application. Their standards are much higher than loan pre-qualification requirements.

It wasn’t always like this.

During the housing boom in the early-to-mid 2000s, underwriting standards were comparatively loose, allowing many people to take out home loans who lacked the means to repay them. In recent years, loan requirements have gotten tougher. In January 2014 the Consumer Financial Protection Bureau enacted stricter requirements on some mortgages, which included tougher background checks into your bank account, spending and employment history.

Credit History

Underwriters will check your credit score with the three major credit bureaus: Experian, Equifax and TransUnion. If there’s a red flag on your credit report—from such things as bankruptcies and collections—you will have to provide a letter of explanation with valid reasons for your past mistakes and the steps you have taken to correct the credit blemish. You may be able to overcome past credit problems if you have a solid employment history or agree to make a large down payment.

Appraisal

Part of the underwriting process reviews the appraisal of your prospective home to make sure its value matches the size of the loan you are requesting. This is important, since appraisers are sometimes pressured by buyers, sellers and their representatives to set a value that justifies the loan and clears the path for a sale. A good underwriter will take into consideration the location of the home and how it might be affected by natural disasters, such as floods.

Your Perceived Risk

Your income and the amount of money you owe will be factored in during the underwriting process. Generally, your total monthly debt obligation, including mortgage payments, should not exceed 43 percent of your pretax monthly income. More debt or lack of a sufficient income can increase your perceived risk.

The depth of the underwriting investigation depends on how great a risk you are considered to be. An investigator for the underwriter will contact your employer to verify the job and salary you listed on your loan application. If there is a question concerning your job history, credit report or personal finances, the underwriter will ask for additional information.

The best thing you can do to improve the chance of approval is to respond with prompt and complete information.


Bookmark & Share



User Comments


Be the first to comment on this post below!




All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independent verified. Listing information is provided for consumer personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law. The source of the listing data is as follows: Stellar MLS (updated 5/24/22 11:08 AM) |

Listing Search



Translate Tool

Featured Listings
Windermere Real Estate
$520,000
3 BED
2 BATH
Ready to Move In, Bright, Upgraded split floorplan Home! Room for a POOL in the fenced backyard! NO Rear Neighbors! Th... Read More
Windermere Real Estate
$1,125,000
4 BED
3.5 BATH
One or more photo(s) has been virtually staged. Welcome home to the gated community of Lake Down Crest. This 4-bedroom, ... Read More
Windermere Real Estate
$655,000
4 BED
3.5 BATH
Belmer Village is a highly sought after community, Community has a gated entrance, club house, tennis courts pool, ba... Read More
Windermere Real Estate
$985,000
5 BED
4.5 BATH
HIGHEST AND BEST OFFER will be ACCEPTED this Sunday 22nd* I do encourage you to submit your offer, all will be consider... Read More
Windermere Real Estate
$1,750,000
4 BED
4.5 BATH
Take a look at this gorgeous contemporary home on a premium corner lot in the heart of Downtown Windermere. The home was... Read More
Contact Wendy Morris

407-575-5392

Wendy Morris LLC
DBA Wendy Morris Realty
Licensed in the State of Florida
BK 3146762
16797 Broadwater Avenue
Winter Garden, Florida 34787

Your privacy is our utmost concern. We will never sell your personal information. Privacy Policy
©2022 windermerehomes.net - all rights reserved. | Site Map