Underwriting!

Everyone will hear this term approx. 306,429 times their lives, true fact. What is underwriting or an underwriter? An underwriter is not a machine, or a entity of some kind. An underwriter is just a person, like you and me. This is their job title, they are hired by banks, insurance companies, etc to assess the risk a person or a business has.
How does this play in getting a loan for a home?
As for a bank, their concern is the person borrowing the money going to pay them back or is the borrower going to not pay on the home. And this where the underwriter comes in. The underwriter has a set of rules and guidelines to follow that come down from Fannie Mae, Freddie Mac, FHA, the government. And they also have the rules of the bank they work for. There is no way around these rules, they have to be followed.
In the process of getting a home loan, let me tell you where the underwriter comes in. The borrower finds a loan officer; the loan officer gathers the necessary information for the underwriter. Passes the file to the processor for the loan officer, and from there it goes to the underwriter. This part of the process takes the longest. Period. The underwriter will look at the borrower’s current income and in the past, look at the current assets, look at their credit. She will scrutinize the borrower’s history. The more issues that come up with the borrower, the more in depth they get. The less issues the underwriter finds, the faster the file gets done. When the underwriter goes through a file, they will want more information to back up what was handed to them. This is not a big deal, it happens a lot, and usually what they ask for is not a big deal. And sometimes what they ask for makes NO SENSE. But you can’t fight it. And if you try to fight it, the underwriter will think you are hiding something and look more in depth, and will want more information from you. It will seem at times that the underwrite is against you, but they are not, it is their job to make sure you will not walk away from this loan. They are now being held accountable for the bad loans that they pass through.

My advice to you, the borrower, is be completely honest and open when buying a home, because the underwriter will find it and want it. If they don’t get it, you don’t get a home.