5 Things First-Time Homebuyers Should Not Do During the Underwriting Process

You will go through a few significant stages when buying a home, and problems can occur at different points throughout the process. For instance, some borrowers might run into problems when making their initial loan application or near the closing date.

However, the majority of issues arise during the mortgage underwriting process. And that makes sense as it is essentially a thorough screening procedure. We will look at a few typical mistakes homebuyers should avoid that can cause a closing delay.

Incomplete paperwork is one of the primary causes of underwriting delays. If your application is incomplete, underwriters will need to call you before completing the process, or occasionally even at the beginning to fill in the gaps. It includes any specific documentation that your underwriter needs to confirm the particulars of your purchase’s finances.

So that you can submit a 100% ready application, ask your loan officer to help you prepare your application and supporting documents before the underwriting process starts.

A loan application’s underwriting process involves fact-checking all the information you have provided to the lender. The most crucial information relates to your finances because the mortgage lender is preparing to write you a check for hundreds of thousands of dollars and needs to safeguard that investment. Unfortunately, eager homebuyers frequently round up or fudge the numbers based on what they anticipate having at closing. However, only precise figures that can be verified, investigated, and confirmed are taken into account. So, be open and truthful about your savings balance and financial situation, otherwise, your application can be delayed or rejected.

Your underwriter may request more information or documents from you throughout the underwriting process, which usually takes between 30 and 45 days to complete. You must respond to these requests as soon as possible. So, keep an eye on your email and configure alerts for emails from your loan officer. Respond quickly and provide all the information they require the same day to prevent even a single day of underwriting delays. The process will take longer the longer you wait.

You might occasionally be unable to respond immediately (for instance, if you are awaiting a document from your employer). It’s best to inform your underwriter so that they are aware of the delay.

A significant large purchase that could be anything from a new car to pricey furniture, or co-signing for someone else’s loan in the lead-up to purchasing a home is one surprisingly frequent error. Any change to your finances that could be considered major must be postponed until after you have gone through the underwriting process.

Generally, from the time you submit the pre-approval application until you purchase the house, your finances should remain where they are. Any recent alterations to your financial situation that might increase your debt load or decrease your income would slow down the underwriting procedure and might even disqualify you from receiving the loan.

Lastly, avoid changing jobs because your income and employment are important considerations when determining your mortgage. A change in employment will be considered a less stable financial situation. Additionally, lenders will need to re-evaluate your application even if you quickly land a new position with a comparable salary. Not everyone can control their employment situation, especially in these difficult economic conditions. So, speak with your lender if you need to change jobs or anticipate a career change. Knowing this information will enable them to assist you in strategizing your mortgage approval if you are smoothly transitioning your income.

Though many uncontrollable factors could delay or derail your mortgage process, there are a few strategies, like the ones mentioned above that can increase your chances of a straightforward mortgage underwriting process.

If you are unsure of any home-buying terminology or underwriting procedures, do not be afraid to ask your real estate agent or lender for clarification. Additionally, be forthright if you suspect that your underwriting documentation may contain errors.

To learn more about the mortgage process reach out to our experts today. Our professional team will be glad to answer all your queries and offer advice to make your home-buying journey smoother and stress-free.