What does an underwriter do?
An underwriter plays an important role in your home purchase, but the term may sound mysterious or strange. Find out what an underwriter does for you here — and how you can make his or her task smoother and more efficient for a faster closing.
What is a mortgage underwriter?
The term underwriter can have several meanings, but this is the relevant meaning here: An underwriter is a person at the home financing company who takes all the information related to your application and reviews it. Then, based on the company’s requirements, the underwriter makes a decision as to whether the financier will approve your application for home financing.
How the mortgage underwriting process works
To complete this process, the underwriter reviews documents such as bank statements and tax returns. He or she also looks at credit reports, property surveys, titles, and appraisals.
Just as important, the underwriter is also making sure that the application is compliant with federal regulations. Keep in mind that, by law, your financier has to provide you with certain disclosures within certain time frames, and you must acknowledge in writing that you received them.
If any of this information is missing, or if documents were dated outside of the allotted timeline, then the transaction is out of compliance. If this isn’t caught by the underwriter, it could cause significant issues for the financing company if this were to be discovered later. It’s important that you provide all relevant information, pay attention to all correspondence, and respond promptly to questions or requests.
The Role of Underwriting in Islamic Home Financing
While Islamic home financing is based on a different foundation from a conventional mortgage, the role of an underwriter is the same. No matter the financier, documents must be checked and verified to ensure eligibility and to comply with laws and regulations.
Guidance Residential’s Top Tips for a Smooth Underwriting Process
Home buyers are often surprised by how much detail home financing companies and their underwriters ask for when the application is being processed. However, the many details provided are used to demonstrate that everything that needs to be there is accounted for.
To avoid costly mishaps and to keep the process moving smoothly for everyone, the underwriter ensures all the buyer’s and lender’s ducks are in a row for each transaction.
Ensure a smooth underwriting process:
- Gather and provide all requested documents
- When in doubt, provide more information instead of less, and never hide information
- Don’t apply for credit or another loan during the underwriting process
- Respond to requests quickly
Read more in our article titled 5 Things to Learn About Before You Apply for a Home Financing Program.
Documents You Need for Underwriting
Here are some of the documents and information you can expect to provide:
- Your completed application
- ID and Social Security number
- Tax returns
- Pay stubs
- W-2 form
- Proof of any other sources of income
- Recent bank statements or proof of other assets
- Details on debts such as car or student loans
Your Guidance Residential Account Executive is here to help with any questions. Looking to refinance or purchase? Rates have dropped to historic lows! Have a friend or family member who is looking for a home? Call 1.866.Guidance, or start an application today!
Learn more about the homebuying process:
- 5 Things to Learn About Before You Apply for a Home Financing Program
- What You Need When You Apply for Home Financing [eBook]
- What is an Islamic Mortgage and How Does It Work?