There are several steps required to obtain a mortgage loan. After the applicant completes the application and provides requested documentation, the loan package then goes to the lending company. The underwriting department verifies all information and makes the decision of whether or not to approve the loan. During the underwriting process, the mortgage underwriter might impose conditions the borrower must meet before the loan can be completed and closed. Conditions might also be imposed before a decision can be made. It is important to meet or clear all conditions, because the loan can't proceed until you do.
Review the conditions and reply promptly. Typical requests include information verification or some type of proof to support one of the applicant's claims. For example, you might report an account paid-in-full, while the credit bureau still shows a balance. The underwriter will probably request proof that the account is actually paid, as you claimed.
Obtain any requested documentation. You may need a form from your bank verifying you have the funds you reported, along with documenting the source. Unless you work for a large corporation, employment verification is usually the fastest condition to clear.
Provide any requested letters explaining late or missed payments, or other adverse financial incidences that have occurred in the past few years. The underwriter might require the applicant to pay off any previously unpaid debts as a condition for approval. If so, pay promptly and get proof of your payment, to expedite the process. Otherwise, you will have to wait for the creditor to update the status, thus delaying your loan processing.
Address any conditions relating to the title. These can be the most time-consuming conditions to clear, since the conditions often relate to unclear ownership, liens or back taxes. It can be a hassle to sort out back taxes with county governments or title release issues with previous title companies.
Always respond to conditions as quickly as possible, and then be patient. Clearing conditions can take days or weeks, depending on the requests and steps needed to remove the conditions.
Avoid tax or title issues by verifying your title is clear, and to check with the county clerk or tax assessor's office to make sure the previous owner had no unpaid property taxes before you apply for the loan. You will be responsible for any back taxes, and the purchase can't proceed until you pay off all taxes owed in arrears, so it is best to know about these issues beforehand.
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