What Does Underwriting Mean?

By
Mortgage and Lending with The Mortgage Experts at America's Mortgage, a Division of Cherry Creek Mortgage Co. NMLS #241555
http://actvra.in/8mr

Q: What does underwriting mean?  

A: Underwriting is the process used to determine whether a borrower falls within the risk guidelines for a particular loan product.  On it's simplest level, underwriting is a "check off the boxes" process.  Do the borrowers have high enough credit scores?  Do they have enough money for a down payment and closing costs?  Do they make enough money to be able to pay the loan back?  The underwriting guidelines are different for every type of loan.  When a mortgage broker "qualifies" a borrower, he makes sure the borrower fits within the underwriting guidelines for the loan they are applying for.

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Topic:
Lending / Financial
Location:
Colorado
Tags:
mortgage tips
underwriting

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Rainmaker
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Vickie Nagy
Broker for San Ramon, Danville, Dublin, Pleasanton
Vickie Nagy, Broker Associate Realty ONE Group BMC Associates | BRE#01363932

It's too bad that the underwriting process happens so late in the process. It would be great if it could fun in tandem witn the appraisal, rather than waiting to fall apart at the last minute.

December 08, 2008 10:33 AM
Rainmaker
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Chris Thomas
The Mortgage Experts at America's Mortgage, a Division of Cherry Creek Mortgage Co.

Vickie - Actually, the underwriting process should happen before you even get a pre-approval letter from your lender.  Fannie Mae, Freddie Mac, FHA, and VA all have online underwriting systems that mortgage brokers can use. 

If the information that the broker enters into the system is correct, then all the human underwriter has to do is make sure that the mortgage broker entered the correct information and that the documentation they sent to underwriting supports it.

Deals really shouldn't fall apart at the last minute.  It sounds like you need to get another mortgage broker.  Make sure they have access to the 4 online underwriting systems, and make sure they use them before sending you a pre-approval letter.

Chris

December 08, 2008 10:50 AM
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Rainmaker
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Chris Thomas

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