For most homebuyers, securing financing through a mortgage loan is the best option to purchase a property. Getting an overall idea of the mortgage underwriting process can help you when working with a mortgage lender and can help you prepare for each step of the journey.
After you send in a mortgage loan application, it goes through the underwriting process. Your lender reviews key pieces of information to determine if you’re financially able to pay them back for the loan.
A mortgage underwriter reviews your credit score, credit history, employment information and assesses the mortgage loan amount to see if it’s worth the investment for the lending company.
There are 5 main steps to the mortgage underwriting process. Theses include:
Overall, an average of 7 to 14 percent of mortgage applications are denied yearly. Most lenders abide by Fannie Mae and Freddie Mac guidelines during the lending process. Government backed loans such as an FHA or VA loan adhere to regulations of the Federal Housing Administration.
Sometimes, lenders will implement their own regulations on top of the standard ones in response to economic factors or other conditions, which is called an overlay.
Getting approved or a loan gives homebuyers more freedom when making a property purchase. By reviewing the underwriting process, you can prepare needed documentation and get a better idea of the timeline for approval.
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I am an energetic, God-loving person who loves all that city of Baton Rouge has to offer. I became a licensed REALTOR in Louisiana and began selling real estate with one of the nation's largest Real-Estate companies. I specialize in residential properties in Baton Rouge and the surrounding areas. I always explore new marketing options, business ideals, and higher-quality service standards to redefine real estate with client experience! As your real estate agent, I assure you that you will get my 100% focus and attention, the absolute best price, and the least amount of inconvenience, whether buying or selling.
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