- Tips to Lower your Electric BillPosted: 12 months ago
- 5 Easy Home Improvement Projects & Upgrades For the WinterPosted: 12 months ago
- Benefits to buying in the winterPosted: 12 months ago
- Cash In with a Cash-Out RefinancePosted: 1 year ago
- Mortgage MythsPosted: 2 years ago
- Q&A: All About Flooring — Hardwood, Carpeting, Tiling, LaminatePosted: 2 years ago
- Tip: 3 Foolproof Social Media Marketing TipsPosted: 2 years ago
- Tips for Hosting a Stress-Free Holiday DinnerPosted: 2 years ago
- Is a Mortgage Refinance Right for You?Posted: 2 years ago
- Check Your Disaster Supplies KitPosted: 2 years ago
- Create an Early Holiday Shopping BudgetPosted: 2 years ago
- 9 Ways to Make Moving Day EasierPosted: 2 years ago
- July 2018 Market Update – Twins Cities RegionPosted: 2 years ago
- Fall Homeowners ChecklistPosted: 2 years ago
- Scam Alert: Spoofed IRS Phone NumbersPosted: 2 years ago
- 15 Years of First Class MortgagePosted: 2 years ago
- How to buy a second homePosted: 2 years ago
- Q&A: Lawn Watering SecretsPosted: 2 years ago
- Troubleshoot Your Air ConditioningPosted: 2 years ago
- Your Mortgage, What to Expect: Clear To ClosePosted: 2 years ago
- Twins Cities Region Monthly Indicators – APRIL 2018Posted: 2 years ago
- Your Mortgage, What to Expect: UnderwritingPosted: 2 years ago
- Your Mortgage, What To Expect: Property AppraisalPosted: 2 years ago
- 3 Tips to Improve your Credit Score and Score a Lower Interest RatePosted: 2 years ago
- Changing Interest Rates Have A High Impact On Purchasing PowerPosted: 3 years ago
- The Myth of Multiple Mortgage Credit InquiriesPosted: 3 years ago
- Things to do BEFORE you buy a home.Posted: 3 years ago
- March Tech Tip: Pack Smarter With PackPointPosted: 3 years ago
- 4 Ways to Pay Off Your Mortgage EarlyPosted: 3 years ago
- Clean House in a HurryPosted: 3 years ago
- Your Mortgage, What To Expect: Document ReviewPosted: 3 years ago
- Chill Winter Utility BillsPosted: 3 years ago
- Six Tips to Help Your Home Sell This FallPosted: 3 years ago
- 4 Things to Know About Closing CostsPosted: 3 years ago
- Understanding Your Credit ScorePosted: 3 years ago
- Equifax Data Breach: What should you do now?Posted: 3 years ago
- Should You Refinance Your FHA to a Conventional Loan?Posted: 3 years ago
- 6 Ways to Save on Paint ProjectsPosted: 3 years ago
- Q&A: Mortgage InsurancePosted: 3 years ago
- How to Keep Your House Cool this SummerPosted: 3 years ago
- Mortgage Education: “What’s the Point?”Posted: 3 years ago
- Q&A: Spotting a Spoof SitePosted: 3 years ago
- Moving ChecklistPosted: 3 years ago
- Squash Marital Money SquabblesPosted: 3 years ago
- April 2017: Twin Cities Real Estate Market UpdatePosted: 3 years ago
- Your Spring Guide to Home StagingPosted: 3 years ago
- March 2017: Twin Cities Real Estate Market UpdatePosted: 4 years ago
- Don’t be a Victim — Four Ways Protect Yourself from Refinance ScamsPosted: 4 years ago
- Local Market Update: Minneapolis Area Association of RealtorsPosted: 4 years ago
- First-Time Homebuyers: Where to startPosted: 4 years ago
- Dear First Class Mortgage:Posted: 4 years ago
- First Class Mortgage. Our Expertise, Your Peace of Mind.Posted: 4 years ago
Your Mortgage, What to Expect: UnderwritingPosted by
We are now at the halfway point of the mortgage process. Underwriting.
What is mortgage underwriting?
During the mortgage underwriting stage, your application moves from the desk of the loan processor to the mortgage underwriter. The mortgage underwriter will ensure your financial profile matches your lender’s guidelines and loan criteria and he or she will ultimately make the final decision: to approve or deny your loan request.
How Underwriters Assess Risk, the “Three C’s” of underwriting:
- Capacity: Do you have the means and resources to pay off your debts? Underwriters assess your available resources by reviewing your employment history, your income, your debts and your asset statements. (Note: If you are self-employed, you may be asked to provide much more documentation of your income and work status.)
They will also review your savings, checking, 401(k), and IRA accounts to ensure you can still pay your mortgage if you lose your job or become ill. Underwriters will pay particular attention to your debt-to-income ratio; they want to make sure you have enough money to fulfill your current financial obligations, as well as take on a new mortgage.
- Credit: Do you have solid repayment and credit history? Your credit is one of the most critical factors in the loan approval process. The underwriter will review your credit score to see how you have handled past bills (like auto loans, student loans, and home equity lines of credit) and predict your ability to make the proposed mortgage payments on time and in full.
- Collateral: What is the value and type of property? The mortgage underwriter must make sure the loan amount meets the loan-to-value requirements of the product. Otherwise, in the case of a default, a lender may not be able to recover the unpaid balance of the loan. An underwriter will typically order a home appraisal which will assess the home’s current worth.
Also, the underwriter will likely review the type of property you are looking to buy, because different kinds of properties carry different risks. For example, many lenders consider an investment property a riskier investment; this is because, historically, a borrower is more likely to walk away from an investment property than their primary residence in a difficult financial situation.
Ready to get started? Give us a call or fill out an online application: APPLY ONLINE HERE.