Your lender says the file is in underwriting. Here is what is happening.
The mortgage underwriting process is the evaluation and assessment of a borrower's financial situation and credit worthiness to determine whether they qualify for a mortgage loan. The underwriting process is typically conducted by a mortgage lender or underwriter, who reviews the borrower's loan application and supporting documentation to assess their ability to repay the loan. The underwriting process typically includes the following steps:
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Initial review: The lender or underwriter reviews the borrower's loan application and supporting documentation, which may include income statements, credit reports, bank statements, and other financial documents.
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Credit check: The lender checks the borrower's credit score and credit history to assess theircreditworthiness and risk level.
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Debt-to-income ratio (DTI) analysis: The lender calculates the borrower's debt-to-income ratio, which is the ratio of the borrower's monthly debt payments to their monthly income. This is an important factor in determining the borrower's ability to repay the loan.
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Property appraisal: The lender orders an appraisal of the property to ensure that it is worth the amount being borrowed.
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Verification of employment and income: The lender verifies the borrower's employment and income through pay stubs, tax returns, and other documentation.
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Underwriting decision: Based on the borrower's creditworthiness, income, DTI ratio, and other factors, the lender makes a decision on whether to approve or deny the mortgage application.
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Closing: If the loan is approved, the lender provides a commitment letter outlining the terms of the loan, and the borrower and lender proceed to the closing process.
Overall, the mortgage underwriting process is a critical step in the mortgage process, as it determines whether the borrower is eligible for a loan and how much they can borrow. It is important for borrowers to provide accurate and complete information to their lender during the underwriting process, and to understand the criteria used to evaluate their application. Have more questions about lending? Click here to schedule an online appointment to our preferred lender, Tia Bennett with Designer Mortgage Services
