As a first time home buyer, this question may be haunting you throughout the loan process. Here are a few reasons why your underwriter may ask for more documents.
- The original documents sent in for review didn’t cover all the requirements to get your loan approved. Or, the documents opened questions the underwriter needs answers or more documents to clear up.
- Your original loan application changed.
- There was a risk flagged on your loan
First of all, the underwriter works really hard towards getting your loan approved, sometimes they need more supporting documents from you to get you into your dream home. The underwriter reviews your loan documents more than once. The first time is when the loan is submitted for “approval”. Typically, there are three things an underwriter do at this stage, accept the loan, suspend the loan or deny the loan. If approved, the underwriter will provide the Loan Officer and Loan Auditor an approval letter with “conditions”. These conditions are the remaining documents needed from you to move your loan forward to rural development. Please make sure to send exactly what the underwriter is asking for. Sometimes, sending more documents can result to them asking for more documents.
When there’s any changes made to the loan, the underwriter will have to review the loan again and other conditions may be applied. Changes like new employment, loan amount increase/decrease, or even household income changing can trigger a new review with the underwriter. If this happens, please prepare yourself, the underwriter will be asking for more documents from you.
Sometimes, when the underwriter reviews documents they find other issues within the documents that may flag your loan as a risk. To clear this issue up, the underwriter will request more documents for review to clear the risk and get a clean approval for your loan.
This process can get frustrating when you spend all your time and energy to gather these conditions/documents to get another list of documents for you to send. Just remember you’re asking the underwriter to approve you for hundreds of thousands of dollars, we have to give them the documents they need. They don’t want your blood or DNA; they just want to underwrite a good loan for USDA.