Explaining the Loan Process Mortgage Underwriting

There's no question that the majority of home buyers need to take out a mortgage loan in order to purchase property. Of course buying a home can be a rather exciting experience, but it can also be quite a stressful one because there are many steps involved in the loan process. The very last step absolutely necessary before you are able to finalize your mortgage loan and purchase your new home is known as underwriting. Not sure what mortgage underwriting is and what all it entails? Here are all of the things you need to know about underwriting home loans in order to help you become a well informed borrower.

What is Mortgage Underwriting?

Underwriting is one of the most important factors when it comes to obtaining a mortgage loan. This is because underwriting is the final step of your mortgage application and could very well impact your ability to go through with the transaction. During the underwriting process, a trained professional who is employed by the lending company known as the underwriter will review all of the application information in order to determine if the loan should be approved or not.

What Does A Mortgage Underwriter Do?

The underwriter plays a major role in the lender's decision to either approve or deny your application for a mortgage loan. To determine whether you're a good loan candidate or not, these are just a few of the many things a mortgage underwriter will look at:

  • Ability to Repay the Loan – The lender will want to know your ability and your willingness to repay the loan, which is why the underwriter will review your credit rating, your financial background and your history with previous lending.
  • The Home You Wish to Purchase – The underwriter will also look at the home you want to purchase with the loan and if the price is fitting to the property. In order to be sure the home is appropriately priced, the underwriter will usually send out an appraiser to provide them with the market value of the home.

How Long Does the Underwriting Take?

The length of the underwriting process really depends on how complicated the loan is as well as the availability and the experience of the underwriter. An underwriter who is not so busy and has a great deal of experience in the industry can usually complete the underwriting in just a few days. If the underwriter has quite a few other loans to review before yours or if your application is a little complicated due to special circumstances, you could possibly be waiting up to a few weeks for a final answer.

Underwriting can often be the most stressful step in applying for a mortgage loan, but it doesn't have to be. The best way to avoid delays and speed up the process is to ensure that you are completely forthcoming with your lender about your financial background and credit history. If there are any surprises that arise during the underwriters investigation, it could take a whole lot longer to proceed with the purchase of your home.

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