A mortgage has become a common procedure that makes the purchase of real estate available for people of different professions and levels of income. However, this process is quite complicated and requires thorough attention and precise documentation. Basically, mortgage underwriting is the process of defining if the loan you ask for is available for you, taking into account specific ranges of risks that can appear during the credit period from the side of the borrower.
Things to consider in mortgage underwriting
Here is the actual flow of the mortgage underwriting that shows what steps you need to take to be accepted by a lender and get your mortgage to buy the desired property. The choice of the building depends on the amount of your mortgage, and the bigger sum you get, the better house you can afford.
The first thing you need to do is to fill in the application for getting the mortgage. You can do it yourself or have it done by paper writing service review companies that will help you do it correctly. When your application is accepted, here are the next steps that bring you forward to your dream house:
1. Check up of your credit history
This step is pretty obvious and is often called prequalification. If you want to get a loan of a huge sum, your lender has to ensure that you have repaid your previous credits in time. Additionally, you can still have an open credit simultaneously but all you need to do is to be able to provide a smooth payment process.
2. Proof of income
The final result of your mortgage underwriting mostly depends on your job and earnings. The bank or the lender should be 100% sure that you are in the capacity to maintain your needs, the needs of your family and repay the loan in time.
3. Property assessment
The lender is usually interested in you buying a decent house that matches all your requirements, expectations, and budget. It means after you choose a particular house, your lender will conduct an assessment of the selected property to ensure that this building corresponds to your loan, your capabilities and if the price of the house actually suits its conditions. Additionally, the lender will compare the house in the neighborhood to offer you the best variant in the available price range.
4. Title search
One more benefit you get from your lender is the title search on the top sites with real estate within your city or country. It is one of the most important steps to check if your future house has any claims, unpaid taxes, or other debts. Moreover, you should also find out more information about its owner, previous tenants, neighbors and so on. The deeper research you hold, the better property you are willing to buy.
5. The lender’s decision
As all researches are finished, the lender gets a clear picture of your case – your credit history, income, the chosen property, and the capacity of buying it. The decision is not always positive and you have to be ready to continue your cooperation with mortgage lenders in the case of failure. Basically, there are three diverse outcomes you can receive:
- approval – however, there are cases when you can be asked for additional documents about your taxes, job, insurance, etc.;
- suspended – in this case, your application is supposed to be inactive due to the mistakes in your documents and you have to contact your lender ASAP to figure them out,;
- denial – it shows that your expectations don’t correspond to the amount of your loan, you can also find out about the reasons why you get a refusal from your lender and can repeat the mortgage underwriting process one more time.
Tips on how to get mortgage underwriting
The process of mortgage underwriting can seem to be challenging but there are some tips that will help you to become a winner in mortgage underwriting and get the expected loan.
- It is vital to structure your documents perfectly well – ensure that you have all required papers before meeting the lender.
- Your credit history has to be exemplary long before you decide to take a mortgage. Double-check if all your previous loans are closed, all taxes are paid, and so on.
- Remember – the sum of your down payment determines how much you are willing to pay for your loan monthly or yearly; the lower these payments are, the more likely you will get the mortgage from the first attempt.
It is high time to start
As stated, if you don’t try, you won’t know. You shouldn’t be afraid of failure or to try one more time. Mortgage underwriting is definitely not an easy process and requires precise attention to detail and time. Moreover, you have to stay focused on your main goal – buying your own house that will correspond to your needs and expectations.