If you have purchased a house and taken out a mortgage, you have likely heard about an underwriter before. But what exactly does this person do?
The underwriter is one of the most important people in the mortgage approval process, even though most borrowers never get the chance to actually meet one! The job of an underwriter is to work behind the scenes to analyze a mortgage application and make sure that prospective borrowers have represented their finances truthfully and can truly afford to buy a home. Ultimately, the underwriter determines whether providing a home loan to a mortgage applicant is worth the risk and makes financial sense to a mortgage company or bank.
Underwriters do a lot of detective work. Underwriting approval depends on several factors, including income, credit history, debt load and cash savings. Buyers need to be able to show that they have the income to afford a mortgage payment. They also must demonstrate they can afford a mortgage payment and the payments on other debt, such as car loans and credit card balances. Generally, a borrower’s total monthly debt obligation, including mortgage payments, should not exceed 43 percent of their pretax monthly income.
Have any questions about the home buying process? With our comprehensive range of residential title services and our commitment to responsive, personalized attention, Bridge Title helps make the process efficient, understandable, and comfortable. Whether we’re working with mortgage brokers, real estate agents, or directly with homebuyers, the Bridge Title team never forgets that what we do isn’t about paperwork. Ultimately, it’s about making a positive difference in people’s lives.