What is Underwriting?

Keelin Billue Gubbels Mortgage, New Home Buyer

We do a bunch of stuff behind the scenes as part of the loan process.  Underwriting is the process by which CFS decides to loan money based on credit, employment, assets, and other factors.  We match this risk to an appropriate rate, term, and loan amount.

Here are some things that may be included in your underwriting:

Verification

Under the rules from the Consumer Financial Protection Bureau, lenders must make sure a borrower is qualified. The information you put on your application must be verified.

Our team of underwriters will check the information on your application and documents. They will contact your employer, for example, to confirm that you work at that job and that you are paid what you said you’re paid. The amount of verification involved depends on your particular situation.

CFS Mortgage needs to be sure that the price of the property you’re buying is comparable to the values of similar properties. We get independent appraisals of the properties prior to closing.  An expert licensed appraiser will provide an estimated value based on a physical inspection of the property and prices for comparable properties that have recently sold in your neighborhood.

Title Search and Title Insurance

A title company looks at the property’s legal history. CFS Mortgage can’t lend money against a house that may have claims on it, so that’s why a title company performs a title search.

The title company will look for things such as mortgages, liens, claims, easement rights, zoning ordinances, unpaid taxes, pending legal action, and restrictive covenants.

Survey

A home’s property boundaries may be verified by a professional survey.

What you Need to Know

Many of these tasks are handled in-house at Chicago Financial Services.  That helps the process run smoothly and quickly.

It’s important that you provide as much accurate information from the start of the process.  Also, the quicker you get back to your loan officer when they request further information, the better the process will go.

“Underwriting” feels like this mysterious thing to some borrowers; however, we try to make the process as transparent as possible.  Just keep in mind that there’s a lot that needs to get done before the loan can close.