The most crucial stage in the home-buying process is the underwriting phase, but it can take a long time—up to a month or longer. Everyone, from borrowers and loan officers to underwriters, wants a quick and successful way out. As a MLO (Mortgage Loan Originator), some strategies can help stir the underwriting process.
Ensuring a quick, smooth, and streamlined loan process is crucial for being a successful loan officer. By putting these useful suggestions into practice, you can expedite the underwriting process considerably, which will enable a quicker loan closing and preserve efficiency during periods of high mortgage volume.
The underwriting process can be a long and tedious one, but there are a few things you can do to speed it up. Here are 7 tips from Loan Officer Hub and Awesome Tech Inc that can help you get your loan approved faster:
1. Present the Most Updated Client Information
As a loan officer, one of the most important things you can do to expedite the underwriting process is to provide your client’s most current and accurate information. This means that if your client moves to a new place or gets divorced, the information should be updated in the application that you submit, and there should be documents present as proof of changes
2. Write a Cover Letter
Writing a single-page cover letter can expedite the underwriting process, make you better at reviewing loan applications, and help you become a smarter MLO. Write a clear summary of the borrower’s information, including income, credit score, assets, and appraisal. Also, if there’s something unique about the loan application, you can make a note of this, as this will save you a lot of time later. This short and precise overview will give the processors and underwriters an immediate identification of what they will be dealing with, helping them prepare and organize. The underwriting team will acknowledge your efforts and thank you.
3. Stay Updated on Guidelines
MLOs should keep up-to-date with loan regulations. Check AUS (automated underwriting system) reports and review guidelines for particular loans, such as construction-to-permanent, two-close, or jumbo loans, rather than depending solely on your memory. When gathering information, keep in mind the document expiration dates to prevent requesting additional information from applicants before the closing.
4. Advise Your Clients to Maintain the Initial Credit Profile
As a responsible mortgage loan officer, it’s part of your job to help make your clients’ loan process go smoothly. It includes advising the borrowers not to do anything that can impact their credit score. Ensure you remind your clients that any major purchases like a new car, applying for other loans, or quitting their job can negatively affect their application during the underwriting process. It’s important to maintain the initial credit profile that your client applied for the loan with. Getting new lines of credit doesn’t mean your loan will be denied, but it can delay the process.
5. Communicate with Underwriter & Borrower
You must have open lines of communication as a loan officer with both the borrower and the lending side (underwriter). You don’t have to get too involved, but you should communicate with the underwriter on a regular basis. A courteous and consistent communication stream is a great way to facilitate and expedite the underwriting process.
6. Prepare Positive Explanation for Items Affecting Credit Score
Finding a negative report on your credit file can make the underwriter worried. So it’s important to explain each and everything that might be a concern. Make sure to address issues like large deposits and job gaps before the application is reviewed. Whether you think the problem is minor or major, it is a good idea to provide some background information before the application is sent to the underwriter.
7. Use Technology to Make Processes Quick
As a loan officer, you can leverage mortgage technology to speed up the underwriting process. Digital forms can help MLOs gather data from applicants quickly and easily. Automated document collections and verification help avoid time-consuming and error-prone manual paperwork, helping speed up loan application review without compromising data integrity and security.
By following these seven techniques, loan officers can easily speed up the underwriting process. As a MLO, you can begin with slight changes and adapt as things move in the right direction for your client. Adopting new ways to be more productive and efficient will make the underwriting process smoother and faster. As a loan officer, if you are more organized in preparing your loans for underwriting, you will definitely be successful in closing a higher number of mortgage loans and enjoy a happier clientele.
Additional Tips:
- Make sure all of your paperwork is complete and accurate. This includes your loan application, tax returns, pay stubs, and bank statements.
- Be responsive to your lender’s requests. If they need additional information, get it to them as soon as possible.
- Be patient. The underwriting process can take some time, so be patient and don’t get discouraged.
- If you have any questions, don’t hesitate to ask your lender. They are there to help you through the process.
By following these tips, you can help to speed up the underwriting process and get your loan approved faster.
Write a Cover Letter to Submit to Underwriter
Composing a one-page cover letter can help you become a more astute MLO, speed up the underwriting process, and improve your ability to evaluate loan applications.
Write a clear summary of the borrower’s information, including income, credit score, assets, and appraisal. Additionally, you can take note of anything special about the loan application as this will save you a ton of time down the road. The processors and underwriters will be able to quickly identify what they will be dealing with thanks to this succinct and clear summary, which will aid in their organization and preparation. The underwriting team will acknowledge your efforts and thank you.
Nobody is expecting you to write a lengthy or intricate cover letter, so keep it brief and easy to read. Add your name, contact, and employer info, and write a few sentences explaining the loan. Now list the data related to the loan– number, type, and the borrower’s information stated above. If you wish, you can also add your notes on why you expect this loan to be approved.
Stay Updated on Guidelines
MLOs should keep up-to-date with loan regulations. Check AUS (automated underwriting system) reports and review guidelines for particular loans, such as construction-to-permanent, two-close, or jumbo loans, rather than depending solely on your memory. Remember the document expiration dates when collecting information to avoid making extra requests from applicants before closing.
Make sure the dates on credit reports, bank statements, and year-to-date financial statements follow the necessary guidelines. Get the usable documents beforehand to make the whole process easier and faster.
2 Big Reasons Home Loans Blow Up In Underwriting – [Underwriting Mortgage Process]
FAQ
Can you speed up underwriting?
How quickly can underwriting be done?
What is the longest underwriting can take?
How can I speed up my mortgage underwriting process?
Keeping in touch with your lender and returning requested documents and information quickly can help speed up the underwriting process. It is important not to open new lines of credit during your mortgage process because this will slow down underwriting. What is mortgage underwriting?
Why should you automate your underwriting process?
Here’s a look at that conversation. Automating the underwriting process to increase speed and improve customer experience. What is driving the demand for a better, faster underwriting process?
How long does underwriting take?
How Long Does Underwriting Take—and Can You Speed It Up? Underwriting—the process by which mortgage lenders verify your assets, check your credit scores, and review your tax returns before they can approve a home loan—can take as little as two to three days.
What should I do if underwriting is taking a long time?
So be thorough when signing and reviewing your paperwork. And keep your communication lines open. If underwriting is taking longer than expected, reach out to your loan officer to see what’s causing the delay and whether anything is needed from you to move the process along.