It’s freaking brutal….but so is all underwriting right now. Remember the underwriters’ job is to assess risk and uncover any reason NOT to make a loan.
The best way to get through underwriting any home mortgage loan other than private hard money (that’s still super easy) is to be prepared with all of the paperwork and answer all potential questions someone looking at your loan file may have.
This is easy but most loan officers and borrowers fail miserably at creating a good loan package for the FHA Manual Underwriter to review.
Document 24 months of income and job history. Explain any gaps or employment changes. Income is broken down into pay periods then months. Make your monthly income is easy to understand. Self-employed borrowers income is averaged over the last two years income taxes. – Properly documented income is the biggest barrier to home ownership, everyone thinks is the down payment or credit – this is just not what we see 3.5% is easy and 560+ credit score is easy.
Document 12 months rent history with canceled checks and a letter explaining gaps or living with family while saving for a home purchase.
Clearly document your available funds for down payment and closing. Have your funds ready when you apply or a letter if you plan to use gift funds or income tax refund to purchase your first home.
Explain everything from the beginning with a letter, signed and dated.
Send all your paperwork in all at once. Sending your file in one page at a time is the worst thing you can do, this is what most LO’s do to the underwriters piecemeal documents, if you see this happening get a new loan officer.
If you are prepared the loan process is still like it always has been, pretty easy