Automated vs Manual Underwriting
In the world of mortgage since the mid to late 1990’s automated underwriting became prevalent with offering of automated underwriting systems (AUSs) from the government sponsored entities of Fannie Mae and Freddie Mac. These systems take information from the application along with your credit report and utilizing algorithms and historical data determine if a mortgage loan should be approved or not. This type of underwriting revolutionized the speed and efficiency of lenders and brough greater consistency to risk determination.
Manual underwriting is when a human reviews all these same factors. This is typically a much slower process and may require more documentation but sometimes this process can approve a mortgage where a computer may not.
Typically, a manual underwrite is performed because the borrower has very little or no credit resulting in a lack of a credit score. Everything would have to be reviewed manually. Most manual underwrites are done on FHA and VA mortgages though they can be offered for conventional and jumbo loans as well.
As with anything regarding home financing please work with a trusted mortgage professional such as the Home Loan Advisors at Hall Financial.