There is a huge market that provides the borrower with financial help. For people seeking home loans, it’s quite a tedious process to get a loan. The mortgage underwriting is done when an individual opts for a home loan. It is this paperwork that is undertaken that decides whether you stand eligible to receive the loan.
This approval is determined based on various factors, such as the current financial scenario, the actual value of the property, and other vital factors. Therefore, it’s significant to clearly understand how mortgage underwriting is done to make sure that your loan is approved easily and quickly.
This article will explain the steps involved in this process and how you can be totally ready to own your dream house.
Table of Contents
Step 1: Submission of the Application
The initial process starts from the moment you have filed your application to the lender. The form thus submitted should accurately include basic information pertaining to the assets under your acquisition, the bank statement clearly stated, the current employment details, information on your debts, etc. It’s on the authorization of the borrowers that the lender is allowed to verify the credibility score. Make sure you furnish accurate details as per the application.
Step 2: First Review
After you have submitted the loan application, you are assigned an investigating officer. The main duty of this officer is to verify that the details you provided are accurate and fall in line with the guidelines provided by the lender.
It’s only after you are qualified or, rather, eligible for the loan that the process continues. In case you forget or need to provide additional documents, this officer will alert you accordingly. So next time when you receive the call, dont be surprised. It’s a normal practice.
Step 3: Financial Review
This is the vital process of mortgage underwriting. This step involves processes such as
- Verification of Income: The officer examines the sources of income that to possess and follows certain protocol checks. This process is done to make sure that you are financially stable and you are capable enough to bear the loan repayment.
- Validation of Asset: Your asset is verified, and it makes things confirm that you have enough money to make a down payment or other processing costs.
Step 4: Appraisal of Property
After the officer verifies your financial background, the next process is to evaluate the market value of the property you are thinking of possessing. This is a vital step as the lender makes sure that they don’t overexceed the amount in lending while the market value of the said property is low. Make sure that the amount you seek is in accordance with the real value of the property. This assurance enables quicker processing time of the mortgage application.
Step 5: DTI Evaluation
Debt-to-income ratio plays a major role when the borrower wishes to undertake a loan for a home. This ratio gives a useful insight into the borrower’s level of income and the amount that he is in debt for. The people having below 43% DTI, have higher chances of their application being approved.
Step 6: Final Approval
When all the above process is duly followed, and you fulfill all the criteria that are laid by the lender, it is only then that your loan application is approved and final approval is given. The concerned party is contacted by the lender, and further process of lending the funds is initiated.
Conclusion
The above processes are extensively explained so that the borrower doesn’t face any problems in regard to the process of mortgage underwriting. Make sure you are ready with all the documents that are asked by the lender, and rest assured that the process won’t really take your time, unlike the traditional mortgage underwriting processes.
