SUBMIT CONTRACT TO YOUR LENDER
When you submit a loan to your lender, it is known as going into underwriting. This executed contract, meaning signed by all parties, along with the earnest money is promptly sent to a title company that will manage and co-ordinate the details through the final closing of the transaction.
The title company, or in many cases; the buyer’s agent, will expedite and forward a contract copy to the buyer’s lender, so the lender can immediately start the underwriting process.
The term underwriting refers to the process that leads to a final loan approval or denial. A loan’s approval status is made by a professional underwriter which uses specialized software programs and number-crunching analysis. Once an underwriter has reviewed all of a mortgage applicants information and documentation, a decision will be made on the loan’s status. There are a few possible outcomes at this point.
The majority of loan applications are “approved with conditions.” This means that the loan is approved — so long as the borrower provides additional, clarifying information. Conditions typically fall into three categories: explanation and correction of anomalies, verifications and attestations, and supplementary documentation.
Explanation and Correction of Anomalies refers to inconsistencies in a credit reports; and may include official explanations of out-of- the-ordinary pay stubs, tax statements, and wages. Verifications and Attestations include verifying a borrower’s income, employment, housing history, and gift funds, when applicable.
Lastly, supplementary documentation requests may include clarification on credit profile items, profit-and- loss statements from a business, and tax-related documents.
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