You’re coming up on the finish line! Just a few little things to finish up before you are officially a homeowner.
Homeowners Insurance
Mortgage lenders require homeowners to carry homeowners insurance. There are a number of reasons for this, but the most important one is that your lender wants you to be able and willing to repay your mortgage after catastrophic damage. The policy is for their protection as well as yours.
- Homeowners insurance reimburses losses from damage by covered causes, and living expenses if you have to temporarily move.
- Liability protection is included for damage or injuries caused by you or your household members.
- Homeowner policies also cover your personal possessions.
Shopping for homeowners insurance can be daunting but your lender is likely to have some great recommendations for companies that they work with often.
Underwriting
Underwriting is the process that the lender uses to assess risk and ensure you meet all of the minimum requirements for a loan. There are many documents needed to close on a loan and the underwriter makes sure all of them are present and accurate.
The loan officer will build a file for you which is then turned in to the underwriting for the final loan approval. If the file is rejected, it will be kicked back to the loan officer to gather the required information. Some of these conditions may be paying off an account, providing extra bank statements, or providing a letter of explanation for various reasons.
The best way to ensure a speedy underwriting process is to make sure you’re responding to requests from your lender quickly. If you start the process by turning in all the necessary documents and you communicate with your lender throughout the transaction, you’ll be in good shape.
