Everything You Need to Know About Mortgage Underwriting

Everything you need to know about Mortgage Underwriting

Having your own house is a big luxury. It is so because the process of acquiring one is very lengthy, time tasking and complicated. This is one of the main reasons why people hesitate in these matters. However, to assist you, the process of mortgage comes in. It is essential to understand how it all works. One of the mortgage components is underwriting, which informs your provider about all the possible risks associated with lending you a home loan. If you want to know more there here is everything about underwriting; 

What Does It Mean to Be an Underwriter? 

Let’s say you have been preapproved for a mortgage and you found a house with everything you were looking for, does that mean you can be offered a loan to buy the house? The short answer is no. Unfortunately, homeownership is not that easy. A mortgage pre-approval is not a guarantee. Once you have found your future place, you will have to submit the full mortgage application. This can be sent to the same lender as the one who gave you the pre-approval or a different one. This application first goes to the loan processor, followed by the underwriter. The underwriter will determine the risks associated with lending you a home loan. An underwriter can be a human being or computer software making the decisions.

What Is the Underwriting Process Like?

After you filled out the application and submitted the required documents, such as bank statements, tax returns, pay stubs, etc., the underwriter will go over everything, including your work history, credit reports, and property value, to judge your ability to repay the loan. The lender will also evaluate your home value, a.k.a home appraisal, and order a title search to confirm that the property is free of any outstanding claims such as unpaid taxes or judgments. Your loan will be made in the final step of the decision on approving, denying, or suspending. If the application is approved, then you will receive the loan, although you might need to provide a few additional documents. If the loan is denied because of a low credit score, you will have to reapply. If the application is suspended, usually because of missing documents, you will have to provide the documents to complete your application process.

How Long Does Underwriting Take?

The process of underwriting can take days or even a few weeks to complete. If your application is complete and no documents are missing, then it will not take very long. Other factors determining the underwriting time include the type of loan applied for appraisal or title search issues, etc.

Pro Tip

Don’t pay your bills late or make large purchases right before you apply for a loan. It is also essential to have a stable job employment history. If your credit score is lower than expected, be sure to check the credit report for errors. 

It is essential to know and understand the process of the mortgage. The process is a bit long and, at times, complicated, so make sure that you have good communication with your provider to address all your issues. Having your own house is a dream for many, and this is where a mortgage comes to help. So make sure that you sign up for a mortgage loan, buy a new house, design it the way you want, and live comfortably with your family and loved ones! So what are you waiting for? Go and start the search now!

When Should You Sell the House?

When should you sell the house

One of the best investments and luxuries one can have is a house. People put their money, hard work, and efforts to buy and make their houses. It takes a lot of time to pay off the mortgage loan and finally own it. However, you might feel the need to change your house or maybe remodel it completely. If you plan to sell your home, then there are few things to keep in mind. Be it the time, market value, or the state of the house, you need to be very aware of it. So to guide you better, here are few factors to help you understand when you should sell the house you own; 

Understanding and Estimating the Worth

Over time, as the material that makes up your house gets old, your home’s value also decreases. People fail to keep it maintained at times, so their houses start getting damaged quite earlier, eventually reducing the value. However, proper maintenance and timely remodeling can help you save the value of the house. So if you plan to sell the house, it is essential to understand your home’s value. You can do this by comparing the house with others in the same area. You can get some remodeling done to improve its condition. You can get its value estimated by a real estate agent for a better understanding. 

The Right Time to Sell 

When it comes to property, market trends are significant. The value of your house depends on the market, which is the very reason why you should understand its workings. There are ups and downs in the market, which means that there is a period when not enough people are interested in buying or selling the property, which results in receiving a lower value for the house. So before you plan to sell your home, make sure that you understand the market’s current trends to get the best rates available.  

The Equity Factor  

Equity is the difference between the house’s market value and the amount you owe to the mortgage lender. So the amount you will receive from the lender after paying your mortgage before you sell the house is a significant factor. So if you will be paying from your pocket to the mortgage lender to sell the house immediately, it counts as negative equity. This is the worst thing to do as it will put financial constraints in the long run. The ideal thing is to have enough equity. 

How Long Does It Take to Sell the House?

There is a reason why it is the worst thing to sell and buy a house simultaneously. Selling a home takes a reasonable amount of time. It depends on the house’s demand, value, how long it stays in the market, and the market trends. So if you plan to sell a home, then make sure you keep a good number of days in mind before doing so to avoid any inconveniences. 

Getting your house and selling it off later are two very important, time-consuming, and huge tasks. They require a lot of in-depth understanding of market trends. If you plan to sell the house, make sure you understand its value, estimated costs, the amount of time it will take to sell it, and the equity factor. You can ask around, do some research on the market and make a plan. So if you have thought about it, then what are you waiting for? Go and put the house for sale in the market! Good luck!