There are different steps involved in a successful mortgage application. The most important of these is the underwriting process. The underwriter’s task is scrutiny of your application documents to ensure they comply with various guidelines and requirements.
Most applicants who choose to handle their mortgage application to save on costs generally fail at the underwriting stage. The fee you spend in hiring a mortgage planner from City Creek Mortgage in West Jordan, therefore, will not be an unnecessary expense as the expert will appropriately plan your documents to pass this intense scrutiny. Here are the elements that determine the outcome of your application when it goes through underwriting.
This element evaluates your borrowing ability. A borrower’s capacity takes into account his or her employment and income history since lenders prefer borrowers with a steady income source. In evaluating your capacity, the underwriter will also assess your debt-to-income ratio, available assets and the available capital to meet your closing costs.
When evaluating the collateral, the underwriter’s primary objective is to ensure the loan amount you’re seeking doesn’t exceed your property’s value. If the property’s value exceeds your mortgage amount, then the lender will be unable to recover the balance should you default on repayment. The most crucial document when evaluating collateral is your intended property’s appraisal report.
This is essentially an assessment of your repayment character. The length of your credit history, payment history, and type of credit are some of the elements your underwriter will evaluate. Before submitting your documents, your mortgage planner might recommend several steps to boost your credit rating.
If your mortgage’s underwriter encounters issues with these elements, he or she might give you a list containing conditions you must meet before approval. This is called a conditional approval. There are, unfortunately, times the underwriter might cancel your application altogether.