In the mortgage loan business there is person who plays a key role in the mortgage approval of a borrower. This important person, who is known as a mortgage underwriter, is appointed by the mortgage lender, and that person can not be seen or interacted by the borrower. Usually, a lender does not approve a loan to a borrower without the consent of the underwriter. In fact, an underwriter is responsible for assessing the risks associated with a real estate loan. An underwriter judges the creditworthiness of a mortgage applicant. He or she determines whether or not a homeowner will be able to pay back the loan. The underwriter scrutinizes the loan application and evaluates the credential of a loan applicant. Once he or she gives the nod, the loan is then approved by the lender. Here we briefly discuss below the role played by an underwriter.
Verification of income
One important role played by an underwriter is the verification of the income of the loan applicant. The aim is to judge whether or not the applicant will be able to repay the loan. In order to come to a conclusion, the underwriter examines the current pay stubs and the past tax returns.
Verification of assets
Assets of a borrower are also verified so as to get an idea whether or not the applicant will be able to pay the down payment and the closing costs. The underwriter checks the bank statements and the deposits of the borrower, in order to come to a conclusion.
Assessment of the credit score
One important determinant of obtaining a mortgage loan is your credit score. An underwriter assesses the credit situation of a borrower and decides upon the loan approval of the borrower.
Review of the collateral
The property that the borrower is planning to purchase is reviewed by the underwriter. It judges whether the lender will be able to recover the loss in case the borrower defaults in paying off the loan.
The role of an underwriter in the mortgage loan process can not be denied. In fact, the efficacy of the mortgage business very much depends upon the performance of the underwriters.