Underwriter Concerns

Other than the basics what are some key factors that underwriters look for?

What tips can you provide me to get faster processing of my loan applications?

Financial history is primarily what most underwriters are looking for. They want to know if the borrower has the monthly income to afford the down payment, the mortgage payments and the cash reserves that will cover unexpected expenses after all closing costs have been paid. Employment history plays a big part here. You want to prove that your borrower has a long employment history that proves commitment and consistency. If you have a borrower that has just started a new job provide all past employment history and specify if the borrower is in the same line of work as their previous positions. Many lenders are primarily concerned with the two years prior to application date, however the longer history you can provide the stronger the borrower will look. The most important aspect of a borrowers financial history is if the borrower has proved that they have the ability to pay off large debts on time.

Underwriters look to tell a story from all the information provided in a loan application. The closer to complete the application, the more information the underwriter has to make an informed decision. If you have a borrower that took out a mortgage one month prior to the current application they want to know why. Was it because they purchased a house and now want a second home, are they already downsizing because they couldn’t afford the existing loan? All of this information is pertinent to getting a loan approved quickly. The underwriter simply wants clarification and proof so they can make the deal work. Sometimes the 1003 will tell one story but the credit report will show other details that perhaps the borrower is omitting or simply didn’t think to provide. With this in mind always try to provide as much information as possible that may not be included in the credit report so the underwriter doesn’t leave anything to question.

I suggest you pre-qualify your borrowers whenever possible. This way you will know what programs they truly qualify for and what requirements they must meet based on program rules and restrictions listed on the credit matrix. Knowing in advance what information your borrowers need to provide will make it easier for you to provide the mortgage lender a complete loan application. On your borrowers completed 1003 application form make sure you indicate what loan program and exact loan amount your borrower is requesting. When you submit the application and credit report make sure you also provide a clear appraisal report, a fully executed purchase agreement, completed 3day state and federal specific disclosures and proper homeowner/hazard insurance coverage. When completing the application make sure you enter all information required including purchase details and make sure it is done correctly. Oftentimes it is the little mistakes that cause loans to get held up during the processing stage. Some of the top omissions and errors on loan applications are:
 

• Purpose of the loan
• Spelling errors
• No listed monthly income
• The date of birth of the borrower
• Missing social security number
• On refinance loans omission of the year acquired and original cost of the property

Consistency and commitment is ultimately what underwriters are looking for. Does the credit report coincide with what the 1003 states and if not is it proven elsewhere? Whether it is requested or not, if your borrower has income or credit information that may create a stronger application, include it in the application and follow the mortgage lenders instructions. This should get all of your loans processed faster.

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