Underwriting is a procedure of due diligence done by an underwriter before mortgage lenders agree to finance potential homebuyers. Mortgage underwriters analyze the financial details given by the applicant and decide on the risks associated with the loan. Underwriters decide whether you are fit for the loan and determine your likelihood to abide by the terms and pay your monthly dues.
Underwriting starts when you have already made the application. Other documents required for the process are:

•  Tax returns.
•  Employment verification.
•  A copy of a government-issued card.
• Permission to pull your credit.

Some clients get good credit scores and are approved quickly with our 6-7-1 process, which aims for a 6-hour turnaround compared to others.
How Mortgage Underwriting Works
After application, an underwriter checks for errors, inconsistencies, and potential risk factors. They also confirm credit reports, liabilities, and research assets, contact your employer, reconcile risks and ensure that your applications satisfy the lenders’ approval guidelines. Depending on the size of the mortgage, high-risk levels may be accepted, and if not, a more comprehensive range of loan products will be offered.
The underwriting process can take up to 1 week, after which the application is approved or denied and sent back to the mortgage officer for borrower notification. Some applications may be approved with some conditions, meaning they may have to supply more information or clarify some information that the underwriter seeks. When the conditions are met, they can carry on with the process. When the application is denied, you will need to find solutions for the issues found and start the process all over with a different mortgage product or lender.
Problems Likely to be Encountered in Underwriting
Most mortgage applications get through underwriting successfully, while others encounter some issues. There are minor issues like typos and errors in employer contacts that can be fixed quickly, while others are bigger, like credit concerns which can lead to delays. Things that can go wrong are categorized into capacity, credit, and collateral. Some of the significant issues that slow down mortgage underwriting include;
Cash in hand
To be on the good side with underwriters, you must provide proof of finances required for the down payment, closing costs, and some cash in reverse. They also need to know about the origin of your money and how long you’ve had it. Like if it’s from savings, gifts, or stocks sold.
Credit History
Underwriters check with creditors and credit bureaus to confirm your credit history. Negative recordings with these firms could create problems for you, and if you don’t meet the required credit status, your application is not approved.
Missing Information
It is essential to cross-check your application severally before submitting it to ensure that all the information and documents required are present. Missing documents and data could get you on the wrong side of the underwriters, and your application can be rejected.
Property Evaluation
The mortgage application could be at risk if the property is evaluated for a lower value than expected. If the seller also doesn’t change the set price regarding this, the underwriter will deny the application.
Doubtful Income
When discovered by the underwriters, wrong or exaggerated information on your income will lead to automatic denial of the application. The underwriters check your income against your tax returns, W-2s, bank statements, and other valid documents, so don’t lie about it.
Irregular Employment
Lack of Proof of long-term and stable employment or a long-term success generating business in self-employment will lead to denial of the application by the underwriter.
Tax Facts
Your tax documents must match all the other financial documents provided. Taxable income enables the underwriter to assess risks and assures the underwriter of secure dealings with you in the mortgage loans.
How to Have a Successful Underwriting Process
Buying a house is a vital decision, and you must prepare well. This, therefore, means that you don’t have to rush anything. Take your time to ensure that all your documents are to avoid delays and problems. An underwriter can approve or deny your application, so it is good and essential to ensure you follow all of the above-given steps and information to have an easy time with the underwriting process.