🏦 Mortgage Underwriting Secrets: What Lenders Look For & How to Prepare 🔑

📋 How to Pass Mortgage Underwriting Fast: Key Tips Every Borrower Must Know 🏡

🏦 What Underwriters Look for (And How to Prepare)

When applying for a mortgage, your file will eventually land on the desk of a loan underwriter. Think of underwriting as the final exam before your loan is approved—the underwriter’s job is to verify all the details and decide if you’re a safe bet for the lender.

The good news? With the right preparation, you can sail through underwriting with fewer delays. Here’s what underwriters look for and how you can get ready.

✅ 1. Credit History & Score

Your credit score is the first thing underwriters review. They’ll check for late payments, high credit card balances, or recent inquiries. Even one missed payment can raise a red flag.
How to prepare:

·         Pay down revolving debt before applying.

·         Avoid opening new credit lines during the mortgage process.

·         Review your credit report for errors and dispute any inaccuracies.

✅ 2. Income Verification

Underwriters need to confirm that your income is stable and sufficient to cover the mortgage payment. W-2s, pay stubs, and sometimes tax returns are required. Self-employed borrowers may need bank statements or profit-and-loss statements.
How to prepare:

·         Gather the last 2 years of W-2s or tax returns.

·         Keep recent pay stubs and employment verification letters ready.

·         If self-employed, organize bank statements and CPA-prepared financials.

✅ 3. Employment Stability

Consistent employment is key. Frequent job changes, gaps in work history, or a switch in industries can trigger extra scrutiny.
How to prepare:

·         Provide explanations for gaps or job transitions.

·         Maintain stable employment leading up to closing.

✅ 4. Assets & Reserves

Underwriters want to see that you have enough savings to cover down payment, closing costs, and a few months of reserves. They’ll verify your bank statements, investments, and large deposits.
How to prepare:

·         Avoid moving money between accounts right before applying.

·         Be ready to document the source of any large deposits.

·         Keep your funds in liquid, accessible accounts.

✅ 5. Debt-to-Income Ratio (DTI)

Your DTI compares your monthly debts to your gross income. Most lenders prefer a DTI below 43%, though certain loan programs allow more.
How to prepare:

·         Pay down high-interest debts.

·         Avoid taking on new loans or co-signing for others.

✅ 6. Property Appraisal & Collateral

The underwriter will also review the appraisal to ensure the property value supports the loan amount.
How to prepare:

·         Choose a home within your pre-approved price range.

·         Be realistic about property condition and market value.

💡 Final Tip: Work With an Experienced Mortgage Broker

Having a mortgage broker by your side means you’ll know what underwriters are looking for before you even apply. At Medallion Funds, we guide borrowers through the entire process, making sure your file is clean, complete, and ready for a smooth approval.

👉 Ready to get pre-approved? Contact us today to start your home loan journey with confidence.

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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory