The Five Key Tasks of Mortgage Underwriting Services
January 18, 2013
The mortgage underwriting process is of critical importance when someone is purchasing a house. Since this often involves working with realtors, home sellers, and the home buyer, it’s important that everyone involved is clear of the vital pieces of the process. Below are five things that are crucial for mortgage underwriters to understand.
Key Task 1: Credit Score Review
As the potential homeowner begins the process of purchasing and obtaining a loan, mortgage underwriters are responsible for a thorough evaluation of the applicant’s creditworthiness. Key items to look for are amounts of outstanding debt and how well the applicant meets their payment deadlines.
- The ability to understand a credit score and to determine what factors are positive or negative is a skill that a mortgage underwriter must have.
Key Task 2: Confirmation of Income
The details are crucial when it comes to mortgage underwriting; what the applicant claims must be verified. The applicant must be able to demonstrate that their income is high enough to pay back the loan and the honesty of the applicant is also a factor to be considered. An underwriter must receive pay stubs and past tax returns. In some cases, it may be necessary to ask for addition information from the applicants. Lenders typically use a debt to income ratio to make their decision about an applicant.
- The applicant’s income is a key piece of the puzzle to show whether they can back the loan back or not.
Key Task 3: Property Appraisal
A property evaluator will come with mortgage underwriting. The house that will be mortgaged should be evaluated to make sure that the price of the home does not undervalue or overvalue the property.
- Like other parts of the process, it’s important that all information is verified as accurate and fair.
Key Task 4: Review of Down Payment and Closing Costs
The underwriter is responsible for verifying the property down payment in addition to the closing fees for the home. This can include verifying bank slips if some deposited money was drawn from shared income. Recall that it’s important to know whether the account that was used will be empty after this transaction as this does influence the assets of the applicant.
- Verifying information and relating how that updates the applicant’s information is an important duty for the mortgage underwriter
Key Task 5: The Title Search
The title must be provided in order to prove that the property seller is the true owner of a property. The title must be authenticated for verification purposes. The mortgage underwriter must work with a title search company in order to do this. The title insurance policy is then transmitted as well to move the buyer, seller, and mortgage underwriter towards the closing process.
- The home title must be verified in order to transition towards the closing process. The property seller must be the true owner of the property.
Mortgage underwriters play an important role in the mortgage process. They are responsible for seeking out the information, verifying it, and providing it to those involved in the process so that the underwriting is completed efficiently and properly.