What Is An Underwriter? What Does An Underwriter Do? An underwriter is the person at the mortgage lender who reviews and approves your mortgage application and file after it is processed by a loan processor. In order for your mortgage file to go to an underwriter for approval it should include all of your personal financial information like your pay stubs, bank statements, credit report, appraisal, mortgage application, sales contract and other relevant information to your mortgage file.
The underwriter sorts through your information to make sure all the numbers match, like your debt to income ratio, and that your loan application makes sense. The underwriter also looks at your credit report to make sure it is ok. After all of this, the underwriter then compares your information with the qualification requirements of the mortgage loan program that you are trying to get.
Underwriter Approves Loan Or Wants More Information
If your information matches with the loan program requirements then you get approved for the mortgage. If you don’t match and in the underwriter’s eyes it looks like you won’t match even if you could provide more information then you will not get approved for the mortgage. But in many cases, the underwriter will give a conditional approval back to your loan officer that asks for additional information from you.
In the industry we call these additional items stipulations, or conditions. If we get them as the underwriter has asked for them, then we know that we’ll get your loan approved. If we don’t get them or can’t get them for one reason or another then we know that we probably won’t be able to get your loan done as we submitted it. In this case we’ll take a step back and relook at your loan application to see if there is another way to get it done. You could think of this as “Plan B”.
In some cases, Plan B might just be having to wait 6 months until time has passed and your credit rebounds. In other cases it is waiting until you get a little more money in the bank. In many cases there can be a lot of options to get a loan approved. With this in mind, this should explain why you might get asked for more information than you were originally asked in the beginning of your mortgage application process.
Know this, underwriters are not mean people. Underwriters have a job to protect the bank's money and they will keep asking for information until they are satisfied that you can payback the loan. It's that simple.
