Home Mortgage Refinancing Procedure: Underwriting

Home Mortgage Refinancing and Underwriting -- An Overview

Understanding the details of how a loan is underwritten is important for those refinancing. This knowledge will enable you to notice problem areas possibly before they start, and will help you help your lender speed up any processes that are bogging down. The underwriting process is the step where your application goes for approval, disapproval, or will turn into a request for more documentation.

Home Mortgage Refinancing and the Underwriting Process

Once your papers are in order and ready to deliver to the underwriting department, they will go through a verification process. This can take awhile—requests for verification have to go out to your current mortgage company, your employer, possibly your bank, and any other institution you are using for a credit reference. While this is happening, the appraisal and title search is done.

Verification of Your Data

All of this information is sent back to the processor who handles the verification stage. If there are more questions, the processor will have to work with you at that point to clear up discrepancies. If everything is verified and the processor has no more questions, she assembles it all into a packet and delivers it to the underwriting department.

Document Review

The underwriter assigned to your loan will do a review of your application and documents to make sure everything is present for your particular loan request. The underwriter may also get other validations, and require a second validation on things already cleared by the processor. Normally this can take a few days, but when the market is active with sales and/or refinances, it can take weeks.

Computers and Underwriting

Although some underwriting is done by computers, which is much faster (sometimes only hours), a borrower shouldn’t count on it taking less time. If you have a time limit, don’t delay your paperwork or other necessary documentation because you think you have time. Part of the problem with the computerized system is that sometimes if something is missing or documented incorrectly, the system will reject your application instead of asking for the paperwork.

Conditions to Close on Your Home Mortgage Refinancing Loan

Once your application has been reviewed, you will receive a list of “conditions to close” through a loan representative. This is just a matter of cleaning up details, but should be done immediately to get your loan closed on time. Afterward, you will get the clear to close. Always make sure you get your conditions cleared on time so you can close on time.