Paydayloanskentucky.org – What happens when loan goes to underwriting? When you request a loan from a bank or mortgage lender, at some point, it will say that your application is in underwriting.
If it’s your first time, it’s normal that you are curious about it. Some people even freak out, thinking that their requests are getting rejected.
In this post, we will cover all the information you require regarding this topic. Read the article to the end, so you’ll have a thorough understanding of this subject.
What is Underwriting?
The definition of “loan underwriting” is actually quite simple. It is basically a process in which your lender will evaluate your financial status. They’ll verify your income, debt, assets, and other related things. The one that do it is underwriter.
The purpose of the underwriting is to ensure that the lenders give the loans to the right individuals. Other than that, when loan goes to underwriting, it will also help the lenders to know the risk of giving the loan to certain people, so they can take a necessarily action.
For example, the underwriters might find out about some potential debtors with a not-so-good credit score. They will either reject their requests or accept them, but with a higher interest rate.
|Underwriter's Job Desk|
|Evaluate your credit score||Verify your savings||Evaluate your Debt to Income Ratio|
|Verify your income||Order an appraisal||Verify your assets|
Should I Be Worried About Underwriting
In general, you shouldn’t be worried because the underwriters verifying your application. It’s a general process, and it doesn’t only happen in Nigeria.
When loan goes to underwriting it also means that your proposal has almost reached a conclusive step. You either get a “yes” or “no,” though sometimes it’s a suspension. As long as your debt history is good, your income is stable, and you have decent assets, there’s no reason to be worried.
But, if your credit score is low, and you have an unstable income, you might consider an alternative loan. Because either you receive a rejection or have to pay more for the interest rate.
You can go to another bank with more flexible terms, or you can just borrow money from friends or family. Basically, just think of other choices.
When Loan Goes to Underwriting in Several Process
Say you want to obtain a mortgage loan to buy a house. In Nigeria, it usually takes the following steps:
- First, you apply for the mortgage. Check out how you should send the application.
- Some companies might provide an online and mobile service. But others prefer that you come directly to meet them.
- Give proof for your ID, income, employment, assets, debts, savings, and other information they might ask.
- After that, give the lender the purchase agreement. They will contact the seller to schedule the appraisal.
- Wait for the lender to verify that the asset you want to buy is free from outstanding claims.
- Await the decision. The lender will do the underwriting and soon reveal its decision.
When Loan Goes to Underwriting?
Basically, when your application is in underwriting, it means that you’re already done with the documentation, appraisal, and other steps. You just need to wait for the lenders to make their final decision about your application.
It’s important to note that the documents you provide will affect the process and the lender’s answer. That’s why you should give the proper documents that are not fake and easy to read.
If there’s something you are worried, you might tell them first so you can do something about it. For example, the asset you own might still be in the process of being split between you and your ex-partner. When you tell the staff about it, they might actually help you with some advice.
When Loan Goes to Underwriting in 2023?
In Nigeria, underwriting is a normal process someone has to face when they ask for a loan. There is no change to the regulation for 2023.
However, there might be some changes in the method. For example, in the past, underwriting meant a lot of paperwork. But today, as digital work grows, this process is also done digitally.
What Happens After Underwriting?
As stated, once the underwriting is done, you’ll receive either a rejection, suspension, or approval. If it’s an approval, the lender will send you a Closing Disclosure that contains:
- The loan amount
- The interest rate
- Estimated payment.
- Payment schedule.
- Closing cost.
- and other related information.
Usually, you will receive a Closing Disclosure three days before the closing date. That’s why, if you get a rejection, you can ask the loan officer about it. They should give you a plausible reason for the rejection. You will receive a deadline to overturn the denial by sending a denial letter to the staff. But if it’s denied again, it’s better to go to other lenders that will accept your condition.
When Loan Goes to Underwriting: How Long Does It Take?
Underwriting can take several days or several weeks. It depends on several factors, such as:
- The bank: some banks are more efficient than others.
- The amount of the loan: the more money you ask for, the more time it takes.
- Your document: a complicated document requires a lot of work.
- Time: requesting a loan following Christmas or Eid al-Fitr might take longer as there are too many applicants.
- The underwriters’ quality: some underwriters can work really fast, while others are quite slow.
In general, we can say that when a loan goes to underwriting, you shouldn’t feel worried. It’s unavoidable, and it’s universal around the world. The underwriting process is basically a step in which you will get the answer to your application.