If you are excited to pack your bags and now call Richmond home, or are already here and are thinking about scaling up to a different property, it is no surprise that time will be of the essence. When you are ready to get the boxes packed but still don’t yet have a firm grip of what your timeline on everything will be, it’s a good idea to take a brief look at underwriting and find out more, and see what exactly takes place after you fill out the application for a loan, and provide the documentation needed. During the underwriting process is when the elements are at play that can make or break your loan as a whole, and have bearing on the final outcome.

 In most cases, borrowers are dealing with a mortgage broker and loan officer during their first step. After this step, you can see here that the loan moves into underwriting, where the lender attempts to insure that the borrower is meeting all of their guidelines in terms of income, how much debt they have, credit, and collateral put up. They then also ensure that the borrower meets any secondary guidelines required such as FHA, VA, Freddie Mac, etc. Paperwork such as W-2’s, tax returns, bank statements, and other elements of the income situation are reviewed. Depending on the scenario, other documents or letters of explanation may be needed from you as the borrower. How long this step of the game takes depends on the type of home loan that you were set up with.

For Conventional loans, most mortgage lenders will abide by third-party regulations, or requirements that are put in place by Freddie Mac and Fannie Mae. Their goal is to create conforming loans that can be prepared and then sold into the secondary mortgage market. During the use of FHA loans, the underwriter must ensure that you meet guidelines imposed by HUD, the overseers of said program. During the underwriting process, everything you have provided is simply being summed up. It can tend to be a bit of a nail-biter, but when it is finished, you will be able to have a clear idea of what you are approved for and how to make your wisest financial move.

It is very common to wonder “How long does this all take?” when you are poised at a time of life that you may really feel the tick of the clock. In general, this process can take anywhere from a few days to a few weeks. Many in the Richmond market claim that this takes 5 to 8 business days, and in some cases the underwriter issues a conventional approval. This means that the loan should definitely close, but they are just waiting on one more issue, such as a letter of explanation on a recent deposit. One thing to keep in mind is that if you are self-employed, this is one issue that could make the underwriting take the longest. Lenders just love it when income can be verified by an employer, and this is one tradition that has simply not changed much as of late.

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