Do's and Don'ts While Your Loan is Being Underwritten

Any change in your employment, income, or credit profile, no matter how small or seemingly insignificant, can adversely affect your loan approval. It is critical that you follow this list of Do's and Don'ts while your loan is being reviewed by an underwriter: 

• Do make the minimum monthly payments on your consumer debt until your new loan closes and funds. Any deviation from this may negatively affect your mortgage application.
• Do make sure that your mortgage payments are no more than 15-days late until your new loan closes and funds. As your application gets closer to settlement, please inform your Meridian Home Mortgage contact if you are at risk of paying your mortgage payment more than 15 days late.
  
  **Never pay your mortgage payment 30 or more days beyond the initial due date**
• Do answer or return calls from the Title Company working on your application. On occasion there are outdated or unreleased liens which can cloud the ownership of your property, or similar situations which require the Title Company to contact you and request information to clear your title in preparation of your potential closing.
• Do fax or email us any items that we request from you immediately. These items are required by the underwriter. All of the documents in your file have an expiration date. Every day that passes between the underwriter’s request and the time you provide them means additional items have the potential to expire. We will always be battling the underwriter to crunch time frames on your behalf and to immediately establish the first available closing date.
• Do hold onto all of the pay stubs, bank statements, retirement account statements, pension statements and social security statements that you receive electronically and through the mail until your new loan closes and funds. You may be required to provide them.
• Do not resign from your current job or retire during the loan process. If you have an opportunity to leave your current job for a better opportunity please reach-out to us prior to making a decision to determine how it might affect your loan.
• Do not open any new credit accounts or apply for new credit accounts prior to your new mortgage loan closing. Any new account or credit inquiry can easily be identified by the underwriter and may put your application at risk. We understand there are life situations that arise, such as the need to apply for student loans to finance a child’s upcoming college semester. We ask that you discuss these types of scenarios with us prior to taking action.
• Do not make any balance transfers on your existing credit card balances. Any new account or balance transfer may slow your mortgage application process.
• Do not pay off any existing consumer credit accounts in full (e.g. credit cards, auto loans, etc.) unless it is through the natural progression of making your minimum monthly payment.

Following these instructions will help to prevent any delays in your loan closing. Please call us at anytime if you have any questions or if you would like to discuss any specific scenario.

Things to Know before Your Loan is Reviewed by an Underwriter

After you have completed your loan applicaiton and provided your documents, all loans must be reviewed by an underwriter. No matter if your loan is a Conventional, FHA, VA or USDA loan, it must be reviewed by an underwriter to verify all documents, information and data. 

Before your loan is submitted to an underwriter, we prepare your file to be reviewed so it is prepared for the underwriter to do their part and move to closing. There is a lot of preparation done by many people to get a loan to this point. The borrower, the loan officer, assistants and processors prepare a file to get a loan ready to be reviewed by an underwriter and also jr. underwriters. Once a file has been approved, usually a "Conditional Approval" is issued on every file. There are several things that the borrower (you) can do to help us move your loan both to underwriting and to get a clear to close as quickly and efficiently as possible.

Underwriting

The underwriter acts as a “gate keeper," protecting the interest of the lender and safeguarding the limited funds they have to lend. Underwriters follow strict black-and-white guidelines established by industry investors. These guidelines are harsher than they were during the mortgage lending boom of 2002 – 2008. The days of what many industry professionals describe as “common sense underwriting" are long gone. 

Once an underwriter reviews your loan application (whether for a purchase or a refinance) they will issue one of three determinations: a Conditional Approval, a Suspension, or a Denial.

When a Conditional Approval is issued, a member of our Pipeline Team will call you immediately to review the approval and discuss any conditions needed before we can schedule your loan to close.
Rest assured that an underwriter issuing a Suspension or Denial on your loan does not end your relationship with Miracles Happen. This is where Miracles Happen steps in to defend you, as your advocate. We have an entire team at Miracles Happen dedicated to overcoming underwriting objections, re-working your application, and unearthing underwriting errors.
Still, we will be candid with you at anytime during the process if we do not believe your application has an opportunity to close. Just know that we are devoted to exhausting every last ounce of effort to match your family’s financial situation to a qualified loan program.

While we will be shouldering most of the work, we have come up with a small list of things that you can do to help ensure that your loan closes as quickly as possible. Please do your best to adhere to Miracles Happen's list of Do's and Don'ts while your loan is being underwritten.
Here are a couple of other important things to know:

• Turn-times vary
  Depending on the type of loan for which you are applying and the saturation of the current market, the underwriting process for your application may take up to 5-14 days. A large portion of Miracles Happen's service to you is to gently, but proactively, nudge the underwriter to review your file as quickly as possible.

• Disclosure Mailings:
  You will most likely continue to receive loan disclosures throughout the process, either electronically or through the mail from your designated lender. Although there may be cover letters with these lender disclosures that state you need to sign and return them, there is no need for you to take any action. They are simply being sent to you by the lender so that they remain in compliance with State and Federal disclosure laws. Feel free to discard these documents.

We appreciate your cooperation and patience while your loan is being underwritten. Please do not hesitate to call with any questions or concerns that you might have. We look forward discussing your upcoming Conditional Approval with you very soon.

FHA Mortgage insurance to be reduced

Great news for the housing industry is coming to the mortgage industry. Many industry professionals and those in leadership positions have been avocation for a reduction of the mortgage insurance premium for FHA loans.

The high monthly premiums has deterred many guest time home buyers from getting financing due to higher premiums on the monthly payments of mortgage insurance.

The monthly premiums will be reduced from 1.35% to .85%. This would equate from $135 per month to $85 per month for every $100,000 borrowed. This is a big difference to many home buyers that are looking to purchased a home that will allow them to have the cash flow to purchase  a house rather than rent.

A reduction of the Mortgage Insurance premiums is going to go into effect soon.