How to Have a Smooth Underwriting Process the First Time

Applying for a mortgage can be a stressful process, even if you have experience. For first-time homebuyers, the process can be especially nerve-wracking. They’re not sure what to expect and the uncertainty can make the situation more difficult than it needs to be.

At Addition Financial, we spend a lot of time working with our members who are buying homes for the first time. We walk them through the process, so they understand what goes into underwriting a loan. There are steps you can take to make the underwriting process smooth.

With that in mind, here are some things you can do to ensure that the underwriting process for your mortgage is as seamless (and stress-free) as possible.

How Mortgage Underwriting Works

First, let’s talk about the basics of what a mortgage underwriter does. An underwriter’s job is to assess risk. With mortgages, that means looking at you and any other borrowers who will be on the mortgage and determining, to the best of their ability, whether you’ll be able to meet the financial obligations of the loan.

The first step of the underwriting process is the application. You’ll need to fill it out completely and supply any supporting documentation required. We’ll talk more about those requirements in a minute. The underwriter will then review your information and look for red flags.

They may come back to you requesting additional information or clarification of items on your credit report or financial history. They’ll make a decision when they feel they have adequate information to assess the risk associated with lending to you.

What Mortgage Underwriters Need

Mortgage underwriters need a lot of information to do their jobs. When you complete your application, you should read it carefully and answer each question as thoroughly as possible. Here’s a list of what you’ll need to provide:

  • A completed mortgage application
  • Copies of your W-2 forms
  • Copies of your tax returns
  • Documentation of any other loans, debts or assets you may have

The underwriter will review your submitted information. They’ll review your credit report, verify your employment and income and ask you for clarification of any items that cause concern. They’ll also review information about the property you’re planning to buy if you have already made an offer.

How to Streamline the Underwriting Process

According to Fannie Mae, the average time to approve a mortgage in 2016 was 46 days, while refinancing took about 49 days. That might seem like a long time, but it’s the amount of time the underwriter needs to do a thorough job with your application. At Addition Financial, our average time to approve a mortgage is only 30 days – that means our members get into their new homes quicker and can begin enjoying the benefits of homeownership.

You should expect the process to take a while, but here are some things you can do to streamline the process:

  1. Gather all documents needed and submit them to your loan officer with your application.
  2. Always err in favor of providing too much information. For example, if you had a delinquent account, you might want to provide some supporting information or a letter explaining it. It’s always better to provide more than the underwriter needs than to leave them asking questions.
  3. Do not apply for another loans or credit during the underwriting process. Doing so can affect your credit score and other factors that can affect your qualifications. If one lender turns you down, you can always try another.
  4. Be completely honest in the information you reveal. If you’ve had credit problems or financial challenges in the past, disclose them. The job of an underwriter is to spot red flags and get to the truth, and it’s always best to disclose any issues you may have had up front.
  5. Respond quickly to any inquiries from your underwriter. When lending institutions are underwriting a mortgage, they need to ensure that certain conditions are met. Sometimes, these conditions may require you to pay off a debt or provide additional documentation of your financial history. Responding immediately will prevent your approval from being delayed.
  6. Stay in touch with your underwriter by calling regularly. You know the saying that the squeaky wheel gets the grease, and it certainly applies here. By keeping in touch, you’ll let your underwriter know that you’re invested in the process and want to help ensure a smooth approval of your mortgage.

The First-Time Homebuyer's Guide to a Mortgage

The watchwords here are honesty and transparency. The underwriter who’s reviewing your application is simply doing their job. Anything you do to make their job easy will help to speed your application along.

Applying for a mortgage can be stressful. It’s easy for first-time homebuyers to feel that they have no control, but the tips we’ve provided here can help you streamline the process and get approved for your mortgage quickly.

To learn about Addition Financial’s flexible mortgage options or find out how to apply, click here now.

The content provided here is not legal, tax, accounting, financial or investment advice. Please consult with legal, tax, accounting, financial or investment professionals based on your specific needs or questions you may have. We do not make any guarantees as to accuracy or completeness of this information, do not support any third-party companies, products, or services described here, and take no liability or legal obligations for your use of this information.