Tips for Creating Legible Loan Documents that Sail Through Underwriting

Tips for Creating Legible Loan Documents that Sail Through Underwriting

One thing that drives borrowers crazy is what’s known in the industry as “conditioning”. “Conditioning” is when the underwriter needs additional information before they’re able to approve your loan. Or, they need you to resend documents you’ve already sent.

Typically, the “please resend” requests are due to illegible, crookedly scanned documents, those with pages missing, or something that seems really minor – a folded corner.

For example, take the typical W2 form. Often, they’re printed on thin paper with a light-colored font. Due to being tucked away in a file somewhere, the corner gets folded over.

You scan it in, folded corner and all, and send it to your lender – and get a call back. The underwriter wants to know what you’re hiding beneath that folded corner, plus the document is illegible – meaning, the underwriter can’t read the light font.

The result is, you have to re-scan the document – and probably spend some time fiddling with settings to ensure the printing is dark enough. Sometimes, you have to do this two or three times. Maddening, I know.

What follows are some general tips for ensuring your scanned or faxed documents sail through underwriting.

1. Prepare documents for scanning or photocopying

  • Ensure corners are flat and that the paper isn’t wrinkled.
  • Sign and dated as needed (especially tax forms that were electronically filed).
  • Remove anything that doesn’t belong (i.e. sticky notes or those little “sign here” arrow stickers).

2. Be sure to include all pages of a file

Whether you’re sending a bank statement, a divorce decree or your 1040, be sure to include all its pages – even those you think aren’t important. If you don’t, you’ll hold up underwriting until they have complete information.

3. Create legible copies

  • Whether you scan or photocopy, make sure the resulting copies have legible fonts. This means that when printed out, the fonts are dark enough to be read – especially when faxed.
  • If the fonts are still too light, adjust your scanner or photocopy settings as needed.
  • When scanning your drivers license, be sure all information can be seen on a black and white printed copy: Name, address, license number, photo, etc.

4. When scanning, save docs as jpeg files

  • Sometimes scanning software will automatically save the file as a PNG file, which some lenders can’t use. Or, the PNG file is too big and you can’t send it. Ditto for PDF files.
  • Once you’ve saved the doc as a jpg file, you can use your computer software to reduce its width and height. For example, an 8 ½” x 11″ scanned document can result in a 2 or 3 megabyte file, which may be too large to send.

5. If possible, send files through Gmail

For some reason, some lenders can’t open files sent through Apple’s native email client, or the files get embedded in the email. To alleviate this problem, create a Gmail account and send files as attachments.

Why is all of this necessary?

Due to mortgage fraud and other whatnot in the past, underwriters and lenders are much more cautious and want to be sure you’re not hiding anything.

By creating legible, clean documents that underwriters can easily open and print out, you help ensure your loan application gets through underwriting without holdups – and you make everyone’s job easier, including yours. (Be sure to follow our other tips in the post, “Help Get Your Loan Approved Faster.”)

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