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 financer will approve your application for financing.
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 financer 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.
Home buyers are often surprised by how much detail that home financing companies and their underwriters ask for when the application is being processed. The list of items can often seem overwhelming, but 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.
Do you have additional questions about underwriting? Contact your Guidance Account Executive for more details.