Should I be Worried About Underwriting? Here are 7 Things to Ease Your Anxiety

Should I be Worried About Underwriting

Should I be Worried About Underwriting?

Square One: What Is Underwriting in Real Estate?

We’ve all been there. You’re trying to finalize the paperwork on your dream house, and suddenly, the dreaded U-word comes up: underwriter.Should I be Worried About Underwriting? Simply knowing what is underwriting in real estate can help to alleviate some of the apprehension. In layman’s terms, an underwriter’s job is to verify all your information and ensure you’re a good risk for the lender. It’s a vital part of the mortgage process^4^, though it tends to breed anxiety in the hearts of many.

The Role History Plays in Underwriting

Back in the day, underwriting wasn’t quite what it is today. In fact, few regulations or procedures existed to dictate who was a good risk and who wasn’t. However, since the 2008 housing crisis, more strict standards have been implemented to ensure the financial stability and legitimacy of prospective homeowners.

Through the years, industry professionals have learned from past mistakes. Improved procedures and policies not only ensure a safer, streamlined process but also provide necessary consumer protection. But really, speaking historically, should you be worried about underwriting? Not at all.


Timely Matters: How Long Does Underwriting Take?

Time is often of the essence, especially in home buying. So, you may be wondering, ‘how long does underwriting take’? While the time frame can vary, you can generally expect it to last anywhere from a few days to a couple of weeks.

Sometimes, an underwriter may need to request additional documents, which can cause a delay. It’s best to be patient and provide any additional information needed to avoid any unforeseen hiccups. So, whether you’re a hare or tortoise in this race, don’t sweat it.

An Interesting Trivia: Manual Underwriting

Underwriting isn’t always performed by a faceless machine in a cloud. Sometimes, the task falls to an actual human being, in a process known as manual underwriting. This can prove advantageous, especially if your situation differs from what is traditionally expected (for instance, if you’re self-employed).

It provides an opportunity for your specific circumstances to be considered more in-depth. Manual underwriting can be seen as a more personalized process, so don’t fret if you’re drawn down that path in your journey.


Clear to Close: The Finish Line in Sight

There’s nothing quite like the joy of hearing the magic phrase ‘clear to close’. It’s the green light that means you’ve passed the underwriting stage and are officially approved for your mortgage^1^. By the time you reach this stage, you’ve essentially crossed the finish line!

Remember the rocky cast of characters in your mortgage horror stories? Well, rest assured this ending is more triumphant. So, should you be worried about underwriting? Not when this moment is waiting for you at the end!

The Impact of Current Trends and Statistics on Underwriting

Stats, dear reader, often reveal the bigger picture. Recent figures indicate an estimated 1 out of every 5 requests for a loan modification are denied during the underwriting process. While it may seem like a substantial number, bear in mind that it also means an 80% approval rating. Dressed in leather pants, women, and men alike, bask in the satisfaction of being approved, breaking the misconceptions surrounding the daunting underwriting process^2^.

Conditionally Approved? No Need to Worry

Your underwriter just came back with a “conditionally approved” status on your mortgage^3^. Sounds scary, right? All it means, however, is that your approval is subject to certain conditions being met. Once you’ve satisfied the underwriter’s requests, you’re good to go.

Should you be worried about underwriting if you’re conditionally approved? Not in the slightest. Instead, consider it as a positive – you’re just one step away from getting your mortgage!

Keeping a Check on Pre-Approval

Pre-approval is like having a VIP ticket to the property market. When you hold a pre-approval letter, sellers know you’re a serious buyer, and that gives you an edge. But the critical question to ask is: how long is a pre-approval good for?

Typically, a mortgage pre-approval is valid for 60-90 days. However, this can be extended if necessary. So, should you be worried about underwriting affecting your pre-approval status? Not if you keep a watchful eye, ensure you use your pre-approval within the time frame, and get a renewal if required^5^.


Final Thoughts

Buying a house, especially for the first time, is a mixture of excitement and apprehension. Underwriting, while an essential part of the process, should not be a source of excessive worry.

With better knowledge about what to expect and being prepared to meet any requirements can greatly ease your underwriting worries. Remember, the underwriting process is there to help ensure you’re stepping into a commitment you can feasibly uphold.

So next time you hear the term “underwriting,” instead of panic, you’ll feel prepared. And ultimately, there really is no reason to ask, ‘should I be worried about underwriting?’ Because you, dear reader, have got this.

Donavon Warren

Donavon Warren

Donavon Warren is a seasoned finance professional with over 20 years of experience. Before embarking into the mortgage industry Donavon attended UCLA. He is the owner of Mortgage Rater, a leading mortgage finance company that offers a range of informational services to clients across the United States. As a finance and mortgage author, Donavon brings his wealth of knowledge and experience to the platform, writing about various topics related to personal finance, investments, home loans, FHA loans, VA loans, 30 Year Fixed rates, no-interest loans, mortgages and more. With his insights and expertise, he aims to educate and empower readers to make informed financial decisions that can help them achieve their financial and mortgage goals. NMLS#2470202
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