Veterans have often heard the term Underwriting when is comes to their purchase or refinance. I think this is a term that is said but really never understood. Perhaps there are misconceptions about this person or process. In reality its both. An underwriter is a person and underwriting is a process.
WHAT IS A VA UNDERWRITER?
An underwriter is a person hired by a Lender (i.e. Wells Fargo, Bank of America) to make sure the loan meets the guidelines of the investor or lender. They really have a tough job because a lot rides on them and they are responsible for bad loans that get approved. VA underwriters will take a file and look over it very carefully and make sure that the originating loan officer packaged the file correctly and make sure nothing is missing or fraudulent. Underwriters must understand VA loan qualifications and mortgage approval based on the Veterans credit history, income, debt, down payment, equity and compensating factors. They issue approvals, clear to closes and denials. They are basically the last line in the home buying or refinancing process. If a Veteran can make it past an underwriter then its usually clear sailing until closing.
What is the VA underwriting process?
So now that we have established who and underwriter is, I want to explain the underwriting process. Once the loan officer has established the value of the home, obtained title work, income documentation and VA loan disclosures, the file is now ready for Underwriting. The loan gets sent to the Underwriting and they will review everything the LO put together. They have most of the analytical tasks. They will follow all the guidelines established by the VA for approval. They looks most at the 3 C’s. Credit, Capacity and Collateral. Credit is obviously the documentation used to determine the Veterans ability to make payments on time. Capacity is the Veterans income, debt, reserves and job time. Does the Veteran have the income capacity to make the payments. Collateral is the home and its value. If you can pass the 3 C’s then an approval will usually be issued.Â
Once the file comes out of Underwriting there are almost every time conditions. This is still an approval, but the LO will have to meet additional criteria and sometimes provide additional documentation from the Veteran to get a final approval. Once the underwriter is satisfied and all the VA conditions are met then you will be to close your loan. An important thing to remember is that the Underwriter will also issue funding requirements. This means after closing there might be additional work that needs to be done in order to have funds dispersed.
The whole process of Underwriting can take up to 60 days. I have personally seen it take this long because of too much volume and not enough underwriters. Usually though it takes about 1 to 2 weeks. Don’t look at underwriters as someone who doesn’t want your loan, in fact its just the opposite. They want to have the work and approve files. They plan an important role in the VA mortgage industry and will continue to do so.
Nate has been working in the mortgage industry for 7 years, of which 5 have been with Veterans. He was the top producing loan officer for Flagship Financial Group in 2007 and has put in hundreds of hours to get licensed nationally. Nate loves spending time with his wife and four children. His hobbies and interests are: camping, working on cars, golfing and anything outdoors.Tags: underwriting, va mortgage underwriting guidelines, va underwriting, va underwriting guidelines
My VA Mortgage loan has been approved by the underwriter with conditions. We’ve submitted the requested documents that will hopefully satisfy these conditions. We’re nervous and anxious because we really want this house. Didn’t hear anything today, so I guess we’ll have to wait ’til after Labor Day. Ready for this process to be over.
I have been going through this process since early June. I feel the process was done backwards. I was approved for a VA loan. They started building the house without asking for information. I kept inquiring about when will they need information. I even askd about what should the status of my account look like. I ask if I should keep it higher than what I normally keep it. She says, ” oh don’t worry about it, just live as normal.” As the house gets to it’s final stages, still no information is requested. Then a monkey wrench is thrown. The builder and the banker are fighting. Here is is Dec and I am still going through the process. Finally, after the house is finished and we’ve done the walk through, the request information. What is that all about? I am excited and now scarred at the same time. I think it is torture to let us watch the house being built to our needs with special requests and now we are on eggshells waiting on an answer. This has been a 6 mos experience. I am very very tired and disappointed. I can’t wait till it’s over to voice my opinion. I am so tired that even if the loan finally is approve, I don’t know if I would be able to enjoy it for the first year due to the stress we went through.
I had a VA loan come back from underwriting. It was approved with conditions, one of which was for us to provide a letter stating how much we pay in childcare. When it was submitted to underwriting it came back denied for the loan. They said that the childcare put our debt to income ratio over the limit for a VA loan. We were furious! How is it that an active duty soldier, who has a current VA mortgage that has never been late for 2 years can not get approved for a new VA mortgage, once the sale of the current one is final. It’s rediculous!
romanza,
call 888-657-2848 and ask for eric kandell. I will help you get approved
I am going through my loan process right now with VA Morgage Center. This whole process has been a big pain. We should have closed over a month ago but my broker was dragging his feet and now underwriting is doing the same. They said that they have everything that they need but I have been waiting 3 weeks for it to go to Docs. If you are reading this, do not go with VA Morgage Center, there are other lenders that do VA loans, think about going through a lender for your loan. My lender is Wells Fargo, if you don’t go directly through them for your loan, then things like reduced fees for PCS moves and Closing Guarantee does not apply to you.
wow i thought i was the only one..well we were on to the last step under writing with the va we got denied because we don’t have enough assets in the back we have about 10 000 dollars saved up . this is ridiculous to me that’s the whole point of a VA 0 down loan for vets to be able to buy a home and not worry about having to save a boat load of money to put down . so now we are stuck and do not know what to do ! husband is a deployed, great kick in the pants to keep motivated in Afghanistan they work their buts off and then VA denies a deployed solider makes me furious. so pretty much now if you dont have money in the bank you will get denied , we don’t want to loose this house . its crazy to me a VET should be approved regardless they deserve every benefit.. so now my husband will never be able to use his VA mortgage benefit after 4 deployments!!
,.~ I am very thankful to this topic because it really gives up to date information *;,