The mortgage underwriting process is the final, extensive review phase of a home loan application before a lender approves and funds a mortgage. The homeowner typically has little to no direct contact with underwriters as their reviews are performed behind the scenes.Know More
The job of mortgage underwriters is to conduct a thorough review of one's application details, including existing debts, assets and income. They verify stated income and obtain copies of bank and loan accounts. It is the underwriter who ultimately decides whether an applicant's information is accurate and whether he meets the lending criteria established by the bank.
The underwriter gets a completed loan application file from the mortgage broker or consultant. This is the person who the typical applicant meets with to get pre-approval before making an offer on a home. The consultant's job is to screen an application and credit rating to determine whether a person can get a loan, and at what amount. If the consultant does a good job and the applicant is honest, the underwriting process is often a formality. Banks don't want to waste two to three weeks reviewing an application that has little chance of getting approved. The underwriter just wants to protect against a bad financial investment.Learn more about Credit & Lending
A mortgage indemnity premium is the additional amount a borrower or mortgagor must pay the lender to safeguard against default. Zing by Quicken Loans explains that the premium is attached to a mortgage insurance policy, which is applied to a mortgage agreement to limit the lender's default risk.Full Answer >
Three ways to get rid of mortgage insurance include waiting until the lender must legally drop the insurance; paying down the loan and asking the lender to drop the insurance; and refinancing, says Bankrate. Refinancing and waiting for automatic termination are more reliable methods than early loan payment.Full Answer >
PMI stands for private mortgage insurance, and it protects the lender from loss should the borrower default on the mortgage loan, according to Bankrate. Lenders require PMI if the down payment on a mortgage does not exceed 20 percent of the appraisal value or the sale price of the property.Full Answer >
A mortgage company may refuse payment if the lender has begun the foreclosure process. This is usually because the mortgage company is attempting to collect the full amount that is owed in arrears.Full Answer >