While the underwriter is ultimately responsible for the approval of your loan, there are a few things you can do to reduce your risk and make the process go more smoothly:
These days, many lenders are required to check the borrower’s credit twice during the home loan application process: once during pre-approval and once right before closing. It is important to protect your credit score during the entire application process, which includes making your payments on time, keeping your current job, staying with your current bank, maintaining low credit card balances and avoiding major purchases (e.g. a new car, new furniture) until you have closed on your mortgage. Any changes to any of the above can delay your loan process or adversely impact your ability to obtain a loan.
For the purposes of approving or denying your loan, a mortgage underwriter is essentially a real estate and financial investigator. This means they will be reviewing all of your documentation and paperwork in detail and reaching out for more information when something is incomplete. Don’t be concerned if they ask for clarification on a late payment, a missed signature or a large deposit—these are all normal requests. The important thing is to respond quickly and accurately, which will reduce the length of the underwriting stage and improve your chances of being approved.
The underwriter will take care of reaching out to the necessary parties, but that doesn’t mean you have to sit back and wait. Give your employers or other relevant parties advanced notice that they may be contacted to provide information. Call your lender and/or broker to check on the status of your application to make sure the underwriter is not missing any necessary information. In addition, keep records of your conversations with your lender so you have a record of what documents were provided and when.
With your dream home at stake, the underwriting process can seem very intimidating. However, being prepared and filling out your application and supporting documents carefully and accurately will save you precious time—and make your underwriter happy. A PennyMac Loan Officer will be happy to answer any additional question you may have about the underwriting process.