Mortgage underwriting can be carried out either manually or with an automated process. The mortgage loan underwriting process is nothing but making the required checks whether the borrower is capable enough to pay back the loan amount within the stipulated time and then the decision is made whether to give the approval or no.
Manual Underwriting for a Mortgage
A manual underwriting loan procedure is carried out by the manual underwriter where no automated or software is used to make the loan application checks.
If the borrower's loan application is most likely to get rejected when processed through an automated system but the borrower's application fulfils all the necessary requirements for the loan approval. This is a typical scenario when the mortgage loan application goes through the manual mortgage loan underwriter to avoid rejection via automated software.
Another scenario when the loan application is processed by a manual underwriter is when the borrower's credit score is low as per the norms of the credit score while applying for a loan. Once, the application goes through the manual underwriting mortgage procedure, the borrower is likely to get the finance from the credit institution.
There are a few aspects that the manual mortgage loan underwriter looks for when the application goes through him.
• The loan application should meet a set of particular criteria. Only then the manual mortgage loan underwriter is anticipated to approve the application.
• All the mortgage loan application documents should be well-organized and in place to avoid the document hassle.
• Though there are several documents already submitted, however, while processing the loan application on a manual basis, the underwriter may ask to submit a few more documents too.
Checks Made by a Manual Underwriter
1. Capability:
A borrower should be at a sound income state to fasten the process of the loan application. A manual underwriter makes a check based on the borrower's income, tax returns, assets, previous pending debts, or any other financial responsibility a borrower may be carrying.
2. Credit History:
Another crucial factor the manual loan underwriter looks for is the credit history of the borrowers. The manual underwriter makes the checks of the previous payment records of the borrower. When all the records of the borrower seem like a clean-chit only then the application is good to go.
3. Home Value/Property Review:
Before processing and approving the loan application, a manual underwriter also requires doing a property survey. He may ask for property land documents and even the placement of the property. Suppose if he finds any overdue taxes on the property then he may not proceed ahead with the loan application.
Approaching a reliable, expert and specialized manual mortgage underwriting services firm can make the loan application approval a cakewalk.
