What is underwriting?
Underwriting is the process of reviewing the loan package to determine whether it meets the established criteria to approve the loan.
An underwriter reviews the loan package, including, the loan application, tax returns, paystubs, bank statements, retirement account statements, contract (if a purchase) and appraisal to determine whether the documents will meet the criteria to approve the loan.
After the package is reviewed, one of three decisions
will be issued: approval, suspension, or denial.
If the underwriter is going to approve the loan, typically a conditional approval is initially issued.
This means the approval is conditioned on the underwriter receiving specific documents or information as provided in the approval.
Once the conditions are met, the underwriter will issue a final approval, and the loan documents can be drawn and sent to title for closing; if the underwriter is unclear as to whether the loan package will meet the approval criteria, the underwriter may suspend the loan, this could mean that additional documents are necessary to approve the loan, or the loan may need to be restructured for approval. If the loan package does not meet the criteria, the underwriter will deny the loan.
When we initially meet with you, we review the loan package with an eye towards approval and will discuss what steps will be needed to approve the loan.
If you have received a loan suspension or a denial from another lender, contact us and we will review the underwriter’s decision with you as we are a mortgage broker, we have many wholesale lenders where we can shop your scenario to see if we can turn it into an approval.
Contact us and we will be happy to go over this process with you!
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