What is the underwriter looking for when they review the loan application?

The underwriter will be looking for assets such as checking, savings, 401K etc.  You will also be asked to provide income documentation, recent pay check stubs, W2's (tax returns if self employed), and employment history.  If there is a co - borrower for the loan they will provide the same information.  Providing as much documentation makes it easier for the underwriter to see the whole picture without asking for more information. 

A consistent and stable job history is important.  If you have just started a new job, but have been in the same line of work for several years that is considered consistent.  If you have just graduated from school and started a new job in the field you studied, providing your school transcripts will help the underwriter to understand this.  If you are a seasonal worker and have gaps in employment that are normal for your field there are programs that will work for you.  If you are self employed the underwriter will look for a 2 year history in income.

You asset documentation will be reviewed for an average balance.  If you have a large increase in your checking or savings account in the last month or two, you will need to show documentation as to where the money came from.  In some cases you may have received this money from a relative.  If so, if they are "gifting" you the money, they will complete a gift form, stating this.  If you liquidated a 401K or IRA, showing the paper trail is necessary. 

The underwriter will also review the appraisal for the value on the home.  The home should appraiser for the amount of the purchase price or more. 

If you have any inaccuracies, bankruptcies or late payments on your credit report, you should provide a written explanation for these items.

Not all of these items are always required for all loan applications, it will depend on several different things.  There are hundreds of loan programs available, and none are a one size fits all. 

However, if you work together with your Mortgage Consultant, they will provide you with the information needed for a smooth transaction.  

Paint the picture, and the underwriter will frame it! 

Buying a home in Illinois| 10 things you NEED to know!