The Underwriting Process
When the investors have received all of your files, they must be combined and underwritten. Your file will be reviewed by a professional, and a decision will be reached on the approval and amount of your loan. This will take anywhere from 2 to 5 days.
The underwriter will see that all of your information complies with the FHA guidelines. This includes your income and debt comparison, your employment history, your credit history, your savings for a down payment, and your final appraisal.
Once this review process is complete, the final loan decision will be submitted in writing. The result will be one of these three options:
- Approved - this means everything in your file met the FHA guidelines, and your loan will be processed.
- Suspended - this means that additional documents must be provided before a final decision can be reached.
- Denied - this means that aspects of the file do not meet the FHA guidelines, and your loan ihas been denied.
It is up to the underwriter to decide if the loan is completely approved, or if any documents are needed to supplement the file. These are called "conditions," and your full loan approval may be based on meeting these conditions.
There are essentially only two types of conditions:
- Prior to Loan Documents - this means that there are items which must be provided and reviewed by the underwriter before the loan documents can be requested.
- Prior to Closing - this means that there are items which must be provided and reviewed by the underwriter and/or the loan funder before the loan can close.
You are then given twenty four hours from the time when you received these conditions to meet them before your loan documents can be ordered, or funded, depending on the situation.
In some cases, your file may be electronically underwritten by a computer using artificial intelligence to make a decision on your file. It will review all of the documents and information provided, and ensures that it matches all of the requirements to garner an electronic loan approval.
By using this electronic underwriting system, we can give you a formal loan approval within minutes, if you meet the initial requirements. This is the most common way we handle our customer's business, to guarantee speed and accuracy.