The mortgage underwriting process is essential to verify income and ultimately determine whether the loan is approved or not. In addition to examining your income, the underwriter will also dive into significant events such as recently graduating from school, switching careers, or starting a new business.
Because the amount of money being loaned is substantial, the verification process can be tedious and requires plenty of documentation to get it done.
This overview will give you an idea of what to expect during the underwriting process to better prepare for it. Have specific questions about underwriting? Contact us!
When applying for a loan, the question is not about how much income you need to qualify but how much of your income you’ll be spending on your mortgage and other debts. Most lenders practice a rule of thumb that your mortgage payments should not be more than 28% of your gross income. Your DTI or debt to income ratio should also not exceed 36%.
Some lenders may allow a DTI of 43% as long as you have good credit or if you can afford to place a large down payment.
Underwriters need to determine if you have adequate income to make your monthly mortgage payments. The majority of underwriters follow Fannie Mae and Freddie Mac guidelines, but standards may vary.
To improve the chances for approval, you need to prepare pay stubs for the last two to three months, W2 forms and tax returns for the previous two years, profit and loss statements, and bank statements. They do this to check if your income stated matches the income reported. They also want to verify your employment status with your employer.
Things may get a little tricky if your income is dependent on bonuses and commissions. Underwriters will need to see two years' worth of bonus or commission income to consider it as part of their income.
The requirements get more challenging if you are self-employed. 2 years of income from your business is usually required, and in place of W2s, you need to prepare profit and loss sheets, balance sheets, and personal and business tax returns.
It’s not unusual for the underwriter to come back with questions about your submitted documents, so don’t be alarmed. Respond quickly and submit at once to make the process faster. Underwriters will know your income, so there’s no need to hide any information. Being upfront can go a long way in getting your loan approved.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 253261
4165 Little York Rd.
Dayton, Ohio 45414
Our Website strives to ensure that its services are accessible to people with disabilities. Our Website has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Our Website makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows candgmortgage.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Our Website accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Our Website continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Our Website website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Our Website website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: firstname.lastname@example.org