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Understanding the Underwriting Process
There are several elements of the traditional underwriting process that any mortgage lender will want you to demonstrate. These are important to understand so that we can be prepared to secure a conventional mortgage and so Dearfield can be a part of investing in you and your family.
How Lenders Determine Credit Worthiness
Here are 5 major factors to consider.
Proof of Income
You need to be able to demonstrate that you have a source of income. While being self-employed can require more effort to document your income than a W-2, you must ensure that lenders understand how your income will allow you to pay monthly on your mortgage.
Proof of Assets
You must show the source of any cash or other assets, such as savings in a bank account or investment account statements, that you will use to purchase your home.
Credit Score
Your FICO credit score is a composite of these 5 things, and will be pulled and assessed during the loan underwriting process. Your credit score will help determine the interest rate on your loan. Learn more about what informs your credit score here.
Employment Verification
You need to be able to verify your employment status through an employer verification letter, pay stubs, W-2, 1099s and/or tax returns. Additional documentation is required for individuals who are self-employed.
Other Key Documents
You need to verify your identity and any large assets or additional income streams you own, as these will be needed for underwriting.