The Underwriting Process Isn’t Scary!
Underwriting! We often hear from clients that the underwriting process intimidates them. We believe there is a stereotype in our industry that underwriters are “out to get” clients by trying to hinder them from closing.
This is simply not the case with RMN and our underwriting process! Our goal is to get more people approved for loans, NOT to gate-keep people from the homes of their dreams. We recognize that the process with each lender is vastly different, but we are spoiled by our underwriting process here, and those that work with us get to reap those benefits!
Let’s define what underwriting is and why it gets a bad rap, and then dive into why the way we do it at RMN works out so seamlessly for us and our clients.
What is Underwriting?
Underwriting is an important piece of the lending process that is meant to make sure that institutions are lending responsibly. To do this, an underwriter has to evaluate a loan application to assess the risk profile of the borrower and verify that they can repay the loan based on a variety of factors such as credit history, financial history, income, debt-to-income ratio, etc.
If a loan application isn’t thorough and solid on the front end, there may be a couple of rounds of follow-up between the underwriter and the lender or borrower, which can be time-consuming—we all know that emailing back and forth can be a headache!
Some underwriters also specialize in certain loan types and aren’t authorized to approve loans outside of their specialization. Even in the world of mortgage loans, some underwriters may only be able to underwrite certain types of loans.
The underwriting process has gotten a negative stereotype attached to it for being lengthy and difficult because the process can be more time-consuming if additional questions and verification are needed or if lenders need to seek out different underwriters for different types of loans and apply pressure on them continuously to bring attention to their borrower’s application.
How is RMN Different?
Our underwriter is right in our office! This eliminates the struggle of back-and-forth emailing or playing phone tag. When a lender in our office has a question or an analyst has a file to be underwritten, we physically walk to our underwriter’s office to hand it to him, making the process much more efficient!
Our underwriter also approves ALL loan types— Conventional, VA, Rural Development (USDA), and FHA.
We save so much time discussing things with our underwriter right in the office and gathering all the needed documentation upfront, so by the time the file lands on our underwriter’s desk, it is easy to review and approve quickly!
Our process is so unique that we aren’t sure you’ll find another institution (bank, credit union, or mortgage company) with a process like this, especially for every loan type. Other lenders are sending it across the city, state, or country— and they “hope” they’ll get attention as quickly as they’d like.
Bottom Line and Red Flags to Watch For
You can discern a lot about a lender’s underwriting process by how they react to different types of loans or loan programs—or try to discourage you altogether from looking more into a loan that might be a good fit for you. If a loan officer discourages a program such as VA/RD/FHA, it’s probably because their underwriting process hinders their ability to efficiently get these loans done. It has absolutely nothing to do with the program itself! In fact, some ‘local’ banks don’t have the ability to underwrite certain loan types themselves and have to broker them out and rely on other lenders to handle the processing and underwriting!
Underwriting should never be a scary process. At RMN, we never submit a file to our underwriter and hope it gets approved. It will be approved because we’ve done all the work upfront to make sure it is solid!
We have been offering these programs since 1987— trust our knowledge and experience! We look forward to working with you!