Want to Make Mortgage Underwriting Faster?

Answering these 3 questions can make things move quicker

As someone who helps borrowers through the mortgage process, one of your goals is to provide a top-notch experience. And to do that, you want the file to move forward efficiently. Underwriting, though, is a place where files can slow down, and many times it slows down because information is missing, which leads to back and forth conversations about where documents are and how long it will take to get them.

Remember, the file goes to underwriting, but you don’t go with it. As a result, the more information you can include up front, the better. The more complete the file is, the more efficient underwriting can be!

Here are three questions underwriters frequently ask about information submitted with files. You can answer these ahead of time by including a cover letter or even a quick note on the submission sheet – it makes a world of difference!

1. Will the borrower sell their existing property before closing?

Be sure to indicate this on the 1003. If the existing property is noted as Pending Sale (PS), that indicates to the underwriter and DU that the existing property will be sold prior to the closing of the new loan. If instead the borrower intends to sell the existing property after closing, then in most cases it should be listed as retained. A quick note answering this question upfront is always helpful.

2. What are these retirement funds for?

Underwriters often need to know what’s happening with retirement funds. Will the borrower be withdrawing retirement funds for closing? Are they in the file for reserves? Why has this retirement account information been included? 

If the borrower plans to use retirement funds as cash to close and hasn’t withdrawn the funds yet, a note to the underwriter indicating that is great. If the funds are being used for reserves, remember, you always need the terms and conditions of withdrawal to confirm the borrower can actually get at the money if they need it. If you just included them to make the file look better, thank you, but without the terms and conditions of withdrawal, underwriting can’t consider these funds.

3. Where did this earnest money come from?

If the borrower supplied a certified check for the earnest money, underwriting still needs to see where the funds came from. We should have bank statements showing the funds being pulled out to draft the check. Usually, we will see the amount of the check plus the fee that the credit union or bank charged for the certified check. If we can’t tie the funds back to the borrowers account, then we probably can’t use it or need more paperwork to document where it came from, such as a gift letter.

These small things really help

Giving context to these items in your file is tremendously helpful for underwriting. And more importantly, it’s helpful to your borrower, because things will move along quicker!

If you have any questions, send us an email. We’re always happy to help.