Celeste O’Hara, NHCB

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Submitted to Underwriting: What Does That Mean?

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The loan approval process goes through various stages as you get closer to your settlement date. From initial application to final funding, lenders assign these different stages different names. Your loan will initial be an application then soon thereafter submitted to processing and after that submitted to underwriting. Of course, all stages are important and you can’t get to the next one without completing the previous one, but submitted to underwriting does carry with it a higher level of importance.

When you first submit an application to a lender, your loan file is digitized and then submitted to an automated underwriting system, or an AUS. The AUS will then return a list of items that need to be included in the loan package and verified. You will provide your loan officer with an initial collection of documentation such as pay check stubs and bank statements and the like but your loan will soon be transferred to the loan processor who will prepare your file for submission to underwriting.

Before doing so however, the processor will review what you have provided while also ordering various third party services and reports needed to complete the file. The processor will order an appraisal and title work, for example. The processor’s duty is to make sure that everything the underwriter will need is included in the package. Once the processor has made that determination, the loan is then submitted to underwriting.

It is the underwriter’s job to compare what the AUS is requesting with what is included in the file. If the underwriter has a question or something in the file doesn’t quite match up to what is requested, the underwriter will contact the processor for more information.

When the loan is submitted to underwriting, it’s the last step before your closing papers are ordered. How long does it take to make such a review? Technically it doesn’t take that long for an underwriter to review a loan submission, it can be done within a couple of hours to review the entire package. However, the underwriter will have several applications to approve so while the specific approval doesn’t take all that long it may take some time for the underwriter to approve other applications submitted prior to yours.

Once your loan is ultimately approved, the underwriter clears the package for loan documents and your file is electronically delivered to your settlement agent to schedule a closing.

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