FHA Loan Submission Process
Federal Housing Administration is based on the ideal of boosting the American economy by making home ownership possible for US and non-US citizens. FHA home loans and mortgages are known to be comparatively more lenient and easier than its respective competitors in the market. The FHA home loan process is quite the standard procedure which includes pre-qualification, pre-approval, document verification, appraisal, underwriting and closing meeting.
If you have decided to become a home owner and have applied for an FHA home loan then you are likely to go through the above steps. You start with the pre-qualification process in which the lender will decide on verbal or roughly written information the borrower has provided that whether he is eligible for the loan or not. This step doesn’t account too much but it gives you a kick start. FHA has no high standards or walls which the borrowers need to reach in order to get a loan approval. However there are some minimum requirements which need to be met in order to be a potential candidate.
After pre-qualification the borrower goes through the pre-approval process where all his financial statements are checked. This includes credit card history, debt, assets, income, and savings. If you meet their minimum requirements then you are good to go towards the document verification process. In this process you will be asked to provide original standard documents and at some point may be asked of additional documents. After the documents have been verified the next step is the appraisal which is the inspection of the property you have decided to buy.
Now comes the most crucial step of the FHA loan submission process and that is the Underwriting.
How long does an underwriting takes?
This is probably the key parameter in the loan submission process because you cannot proceed or expect to be approved for a loan without it. An underwriter has the job of verifying all the documents once again before coming up with a decision. It is the hefty job of an underwriter to determine whether the borrower meets the minimum eligibility criteria set by the lender and also whether the borrower meets the minimum requirements as per the guidelines set by the Department of Housing and Urban Development (HUD).
The borrower never gets to interact directly with the underwriter so you will probably never get to know what goes down in that whole process. Whatever additional information and request the underwriter has he will forward it to the respective lender with whom you have reached out to. The lender will deliver you the requests.
A few weeks can take up until the underwriting is finished and the deal is closed. If the underwriting is delayed then it is probably because some of the required documents are missing or the underwriter is taking too long to examine them.
If the underwriting goes smoothly then you are almost at the end of the line. The final step is the closing meeting in which all the documentation and paperwork is provided by the underwriter and a settlement is made. The submission process can take up to several weeks until the closing meeting. You can speed up the process by having all the paper work and documentation ready before hand. You can also recheck and visit the property you have decided to buy so that the appraisal process doesn’t take much of your time and the loan can be processed as soon as possible.