The Role Of Mortgage Underwriters
Mortgage underwriters are those who will be reviewing your mortgage loan application and decide whether your mortgage loan application gets approved or not.The role of mortgage underwriters job is to make sure that every line item you stated on your mortgage information is correct and their job is to verify the information from your mortgage application and your credit report.
Responsibilities And Role Mortgage Underwriters
Mortgage companies rely on mortgage underwriters to be their Guardian Angels in making sure that the mortgage loan does not go bad. The role of mortgage underwriters is to avoid to underwrite loans that eventually go into default will most likely get investigated for incompetence and/or criminal liability. Mortgage underwriters take their job seriously and have a lot of responsibility put on them. However, like in all fields, there are the few that take their jobs a little too seriously when it is not necessary and that includes mortgage underwriters. There are unreasonable mortgage underwriters in the industry who can make many lives miserable and can probably drive anyone insane.
Conditions Requested By Mortgage Underwriters
The mortgage application process can be extremely stressful if you are not an organized person. The role of mortgage underwriters is to ask you for many documents such as tax returns, W-2s, bank statements, bankruptcy paperwork if it applies to you, foreclosure paperwork if it applies to you, deed in lieu paperwork if it applies to you, short sale HUD settlement statement if it applies to you, divorce decree if it applies to you, child support payments if it applies to you, and sources of irregular deposits or larger deposits. It is expected from mortgage underwriters to request conditions and mortgage loan borrowers should understand that mortgage underwriters have tons of financial responsiblities and their job is to make sure that the mortgage loan they underwrite and approve does not go into default.
Typical Requests And Role Of Mortgage Underwriters
Mortgage underwriters will most likely request updated bank statements and updated paycheck stubs. If you extend your closing, you will be required to provide update bank statements and paycheck stubs until the time you close. This is a reasonable request and mandatory for all mortgage underwriters and mortgage lenders.
Letters Of Explanations
Letters of explanations will be part of your mortgage application process and may seem ridiculous many times. However, since mortgage underwriters have the power to approve your mortgage loan or deny it, if mortgage underwriters request letters of explanations, the best thing to do is to provide it. If you were late on your credit card payment, mortgage payment, auto payment, student loan payment, you will need to write a letter of explanation on each late payment or derogatory credit item on your credit report. For those with multiple of derogatory prior credit items, the chances are that you will need to explain every single derogatory credit item with a separate letter of explanation. If you had multiple jobs in the past two years, you also need to write letters of explanations. If you had a foreclosure, deed in lieu of foreclosure, short sale, and/or bankruptcy, you need to provide the actual documents as well as a detailed letter of explanation.
How Mortgage Underwriters View Bank Statements
Your bank statements will be scrutinized and analyzed with a fine tooth comb. Any irregular deposit of $200 dollars or higher needs to be sourced and a letter of explanation will be required. If you deposit cash in your bank account, that cash will not count. Cash is non-existent in the mortgage industry. Many folks have mattress money but this mattress money cannot be used towards your mortgage down payment. If you cannot source your irregular deposits and you have a lot of cash, your best bet is to deposit all of your cash in your bank account and wait 60 days. Mortgage lenders ask for 60 days bank statements and any irregular deposits older than 60 days will not count and does not need to be sourced.