Real Estate Buyer’s Agent: The Dos and Don’ts of the Dreaded Underwriting Process
Buying a new home in the post-recession real estate market can be a challenging and time-consuming process, especially when it comes to the mortgage underwriting* process. Today’s underwriters have to adhere to strict credit and approval guidelines and approvals can easily get derailed if certain situations arise. As a result, it is ever-so-important for the homebuyer to do everything he/she can to help simplify the underwriting process so it goes as smoothly as possible.
What to Do Before and After Applying for a Mortgage
The most important thing a homebuyer can do when applying for a mortgage is to gather all of the documents requested by the underwriter. The application should be completely filled out and submitted with all the required documents and signed disclosures. Underwriting a mortgage can be a lengthy process in general, but by delivering all of the required documents when applying, a homeowner can help improve their odds of a quicker response. The most common documents requested by underwriters include, but are not limited to:
- Completed and signed loan application
- Copy of each borrower’s driver’s license
- Current paycheck stubs (some may require the last three consecutive pay stubs)
- The last two years tax returns (if self-employed, business federal tax returns and additional support documents will be required)
- The last two months bank statements
- Any documents pertaining to a divorce, bankruptcy, or foreclosure
- Current mortgage statement and homeowner’s insurance information for each mortgage you hold (if applicable)
If anything changes in the homeowner’s life (i.e., new job, lost job, income change, medical leave, bank change, etc.), the underwriter needs to be notified immediately. Don’t hope the changes will go unnoticed. The lender will find out about them and this can cause severe delays in the loan’s processing or denial.
The best course of action is to avoid making any changes in income, credit, or assets until the loan is approved and finalized. If opening up a new credit line is essential, such as taking out a loan or buying a car for business purposes, then it is best to inform the underwriter in advance so the homebuyer can learn whether or not it will impact loan approval.
Homebuyers need to be patient and understand that today’s underwriting process can sometimes be frustrating. In some cases, the underwriter may request additional supporting documents or they may make some requests that seem silly or not applicable to the mortgage process. However, everything the underwriter asks for is essential to the process.
8 Things to Avoid Doing When Your Loan is in Underwriting
- Do not quit your primary (or second) job or submit a letter of resignation
- Do not take un-paid time off from work
- Do not use your credit cards for excessive purchases
- Do not have your credit checked excessively
- Do not over-draw your bank account or bounce any checks
- Do not transfer funds from one account to another without a good reason
- Do not start spending money on home furnishings until you close on your new home
- Do not cancel any credit cards, especially those that you have had for awhile
How Can a Real estate Buyer’s Agent Help Make the Underwriting Process Smoother?
At Just For Buyers Realty, our real estate buyer’s agents are here to help you realize your dream of owning a new home. Our agents are dedicated to helping homebuyers get the best homes at the most reasonable terms and we offer our clients helpful guidance and advice throughout the entire home buying process by directing you to reputable loan officers with proven track records. We are with you every step of the way, from finding the right home to making your bid to closing the deal. Just give us a call at 910-444-2851 today. One of our exclusive real estate buyer’s agents will be more than pleased to assist you.
*Underwriting is the process that financial service providers like banks and loan providers use to assess the eligibility of receiving a loan.