WHAT ARE AUTOMATED UNDERWRITING SYSTEMS

WHAT ARE AUTOMATED UNDERWRITING SYSTEMS?

Your loan application is entered into a specialized software program that evaluates your entire application, and within a matter of moments your approval is issued. Sound easy? It is, but that doesn’t mean you don’t have to provide any documentation. You do, but only what the software program says to provide.

Get approved first with an Automated Underwriting System (AUS) before you begin the verification process. Instead of “verify first, approve last,” you will get approved first and verified last.

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If you have excellent credit and a good down payment (anything over 20 percent is generally considered “good”), the approval may only ask for one paycheck stub and last year’s W-2. That’s pretty much about it. Under the old process you would have provided everything under the sun just in case you needed it. In fact, some loan officers used to list the required documentation on the back of their business cards. Some still do. The list of items needed at the time of loan application could be daunting. Paycheck stubs; two years’ worth of W-2s; three months’ worth of bank statements; two years’ worth of tax returns (all schedules); name, phone number, and address of your landlord; a copy of your divorce decree, if applicable; tax returns for your business (for two years, including all schedules); a year-to-date profit and loss statement . . . you get the drill. Now, using an AUS, all the software program does is say, “If you can prove what you said on your loan application, then you can get a mortgage from me.”

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