One of the biggest mysteries for many new homebuyers is the role of the underwriter. What do they do?
It’s interesting that perhaps one of the most important functions of buying a home is the financial mechanisms that allow the real estate magic to happen. Yet, so many people are unaware of how underwrites make it all work.
These behind-the-scenes workers are the ones who give the thumbs up to the lender that a borrower is qualified. Underwriters, who understand the borrowing guidelines and other rules, will take a close look at an application to determine whether the applicant is qualified. For underwriters, details matter. They will review financial particulars and make sure forms are properly filled out so they can exercise their judgment to make decisions that can make or break a deal.
Underwriters will look at income, credit history, debt ratios and other financial details that shape an individual’s application. It’s not enough to just provide the information – underwriters will require documentation and verification, and they will check it twice. As they reach a final decision, underwriters will also check that all applicable documents for closing, such as taxes, title, insurance and the like, are in order.
This is why underwriters must weigh the factors and expertly evaluate the risks with each buyer. This also gives future homeowners the peace of mind that they are qualified and capable of keeping up with the terms of the loan for which they are approved.