5 Things to Know About the Mortgage Underwriting Process

The mortgage underwriting process is detailed in which a lender examines a borrower’s financial information to determine whether to approve a loan. It typically includes verifying income and employment, evaluating credit history, and assessing property value and financial situation.

After the underwriting process, the lender will decide to approve or deny the loan application. There are many things first-time homeowners need to know about mortgage underwriting. But what should they do before applying? Here are some ideas.

Facts to Consider About the Mortgage Underwriting Process

1. Organize Documents. Before applying for a mortgage, it is essential to have all the necessary documents, including pay stubs, tax returns, bank statements, W2s, and other financial records. Having these documents organized and ready to go will make the underwriting process much smoother. Once you have all the necessary documents, you can begin completing your mortgage application. Now is the time to provide detailed information about your current income, assets, debts, and other relevant information. Answer questions correctly, honestly, and accurately for better results.
2. Get Your Credit Score in Shape. The credit score is one of the most critical factors in determining your mortgage rate. Before applying for a mortgage, take the time to review your credit report and make sure there are no errors. If you find any, dispute them right away. Pay off any outstanding debts and avoid taking on any new debt in the weeks leading up to your mortgage application. Lenders should see that the credit score is ideal to ensure they become confident about lending applicants the requested money.
3. Provide a Higher Down Payment. A downpayment is money you pay upfront to the lender when applying for a mortgage. The higher the down payment, the lower the risk for the lender, and the more likely you will be approved for a mortgage. It will also dictate a lower monthly amortization later on. Make sure to have enough money saved up to cover the down payment. It will also help you avoid private mortgage insurance (PMI), an added cost to the mortgage. A higher down payment ensures lenders more security about applicants’ paying capacity.
4. Get Pre-Approved. Getting pre-approved for a mortgage is an excellent way to show lenders you are serious about purchasing a home. It will also give you a better idea of how much you can afford and how much you need to save to make the purchase. When getting pre-approved, make sure to provide the lender with all the necessary documents and information to make a decision. It will speed up the process and ensure you get the best rate possible. As a result, applicants should get the mortgage faster and easier.
5. Submit the Application. Once you’ve found the right lender, it’s time to submit your mortgage application. Gather all the necessary documents and fill out the application accurately and honestly. The lender will then review your application and provide you with a decision. Once your application has been approved, you must provide additional documents to complete the loan process. It includes a property appraisal, a title search, and a home inspection. Once you’ve provided all the necessary documents, you will be ready to close your mortgage.

Conclusion

Securing a mortgage can be complex, but it doesn’t have to be intimidating. With the proper preparation and guidance, you can make the process much easier. Apply to a lender for a mortgage today and acquire the desired property today.

Call Your Trusted Mortgage Expert Today

MidAmerica Bancorp, Inc helps a first-time homeowner get the best deals possible for a home loan. As a trusted mortgage expert, we aim to find the best refinance rates. We’re licensed in ​Illinois, Indiana, Florida, and Wisconsin. Learn more about which loans you qualify for call us at (708) 237-4050 or by browsing our website today.