Odds of Getting Through Underwriting

[Cody Godfrey]

Hey Everyone!

I have a 2 unit I'm currently under contract on. The loan is now in the underwriting stage and my nerves are all over the place. I'm hoping to get some reassurance or input regarding the likelihood of my deal getting approved by an underwriter. The property should produce north of $1,000 cash flow after I move out of it.

Purchase price is $299,100 with 3% seller assistance. I'm using a local portfolio lender who is offering 5% down and 3.5% interest but I have to use a 7/1 ARM loan. The loan originator seems to think everything will be okay but, I'm still extremely stressed out. In your experience what percentage of deals get through under writing?

This is my 3rd property and I'll be owner occupying it. My DTI ratio for my pre approval was 43% and I believe they want it to be under 45%. Our credit scores are in the mid 700's so I don't see that being an issue.

Any input is greatly appreciated!!

[Randall Alan]

Underwriting is about compliance... they are there mostly to make sure the I’s are dotted and T’s crossed so that the loan can be sold on the market.    Your broker knows what the basic rules are, and usually  wouldn’t even put it into underwriting if they thought it was iffy. 

Typically my feedback from underwriting is that they want more /better documentation... they seldom come back complaining about You... it’s usually more about the proof of things... source of funds, income, debts, etc.   

So if your broker is good... meaning they know how to put a deal together for their underwriter, you should be fine. 

Typically the broker will reach out to underwriting if they had any questions as they put your file together.  Once it is to underwriting it usually gets through it unless your broker missed / misunderstood something.

Randy