Mortgage Underwriting: What Is It?

Underwriting is one of the most misunderstood steps in the loan process. During this period, your loan is reviewed by an underwriter (they’re friendly, we promise) and – fingers crossed – approved for the amount you need to purchase your family’s dream home. Sounds scary, right? But it doesn’t have to be! Your lender simply wants to know more about your ability to take on this exciting new adventure. That means they will probably ask you to help out in a few key ways. So, what is underwriting?

Underwriting Defined

Underwriting is the initial stage of the approval process. After signing your application and sales contract, an underwriter will review your documents to ensure you’re a good fit for a loan and able to meet the loan program’srequirements. In other words, the process assesses the amount of risk each potential borrower presents to the lender.

Expert Tip

For further reading on the underwriter’s job, check out this article on how Atlantic Bay Underwriters look at loans.

Underwriters review the loan application and supporting documentation and, ultimately, decide whether lending is an option. If your income, employment, assets, credit, debt, and appraisal details make you a good candidate for lending, the underwriter will issue final approval on your application. In some cases, the underwriter may ask for a few extra items before final approval, such as an updated paystub or additional bank statements.

How Can I Help During Underwriting?

As mentioned, much of underwriting will be done on your behalf, but there are a few major ways you can make the process a breeze for your lender. For instance, don’t apply for any new credit lines or make big-time purchases (like a car or furniture) while your application is in review. Significant changes to your finances and credit will interrupt the process and halt your approval. Additionally, be sure to submit all your requested documents as quickly and thoroughly as possible. Underwriters may reach out for additional information, so the most responsive and forthcoming buyers will get their loan answers faster.

Fast Track Buyer Advantage

Atlantic Bay underwrites all loans upfront, not at the end. And if you haven’t found a property yet but need to know what you can afford, Fast Track Buyer Advantage gives you conditional approval of a dollar amount within hours of reviewing your files — no purchase contract necessary! Other lenders issue preapproval letters, but don’t really start underwriting your file until you have a signed contract. Fast Track Buyer Advantage is:

• The next best thing to a cash offer.

• The means to a faster and smoother closing.

• A gateway to knowing how much you can afford before you shop.

• Confidence granted to the seller knowing your offer is solid.

• If you have any questions about Fast Track Buyer Advantage, we’re here to help!

Understanding Underwriting

Getting yourself acquainted with the idea of underwriting now will set you up for success when it comes to getting the home of your dreams! Underwriting is a crucial part of the lending process and we’re ready to help you get started. Contact us today!