In the modern digital world, getting a loan should be fast and easy. Using the newly-launched Fannie Mae Day 1 Certainty, lenders can actually make loan approval faster and easier for everyone. This has obvious benefits for lenders, but can also have a profound impact on the entire home-buying process for borrowers.
Fannie Mae Day 1 Certainty: Making Affordable Loans More Convenient
What is Fannie Mae Day 1 Certainty?
Day 1 Certainty is essentially a way to integrate automated steps into the pre-verification process, which significantly speeds the lending process as a whole. Also, the program allows lenders to use electronic data as opposed to paper documents, which allows everyone to breeze through pre-approval much faster while, because of no paper, creating a slight environmental benefit as well.
As part of Fannie Mae’s ongoing efforts, this is a significant change on the part of the organization to provide greater efficiency without increasing the risk to mortgage lending.
Across the mortgage industry, professionals at every level and every phase are utilizing digital technology. For example, lenders are already using electronic submission for documents, online checklist for borrowers, and e-signatures for many different documents. All of these options make it easier for borrower to utilize lending services, while allowing lenders to service more prospective clients. Day 1 Certainty essentially takes this already-existing technology and brings it to the next level, enabling borrowers to authorize the use of data as a way to verify important information.
With Day 1 Certainty, lenders can provide an easier documentation process for essential loan information, such as the borrower’s income or debt load. This new program offers dynamic underwriting based on information that can be confirmed by the lender, and income and assets can be verified quickly. This efficient process also eliminates the need for duplicate documents and checks, and gives lenders freedom from some representations and warranties for eligible loans. It all adds up, however, to the basic fact that lenders can perform faster closings with greater confidence.
Property Value
By working with Fannie May Day 1 Certainty, lenders are helped with property value using an enhanced system for waivers on property inspections while using the Collateral Underwriter program for enhanced certainty.
Employment Verification
Using an employment validation service contract, lenders have greater confidence and stability when verifying a borrower’s employment.
There are also advantages that allow lenders to quickly work through income figures, assets, and reserves.
How Does Fannie Mae Day 1 Certainty Help the Borrower?
But what does all this mean to the borrower? What does it mean to the typical homeowner who simply wants a convenient, affordable mortgage loan? While Fannie Mae Day 1 Certainty has been promoted as a boon to lenders, it’s actually an important shift that has many benefits for borrowers as well.
First of all, lenders are allowed to speed the process, which means you can start the home-buying experience quickly. Assuming your information checks out against third-party vendors, there is no more validation required. This means the process becomes more seamless for you, the borrower and house-shopper.
The appraisal process is also made easier. Fannie Mae will look at appraisal data upfront, which means you have faster processing and documentation from the beginning.
Think about how a typical loan process would go. Lenders will look at a wide variety of information related to your incomes, assets, and debt load, and it’s not uncommon for setbacks to occur. For example, there can be speed-bumps regarding income if some of your money does not come from a typical W2 employment. Perhaps you have income from self-employment, stock options, or profit-sharing agreements; all of these items are treated differently than typical income and can increase the chances of a delay in the mortgage process.
Day 1 Certainty, however, can reduce these delays and increase overall speed, efficiency, and accuracy. One of the best advantages for borrowers is that it offers a way out of appraisal requirements on eligible homes that are being refinanced. A portion of the homes being refinanced may be able to complete the process without an appraisal, which not only speeds the process, but can reduce the overall costs. Best of all, once the lender accepts the offer to waive the appraisal, it’s over and done; the refinancing loan can then be delivered straight to Fannie Mae, all backed by the Day 1 Certainty program for property value, condition, and general marketability.
What to Expect From Day 1 Certainty
When you work with Fannie Mae Day 1 Certainty, you can expect a faster, convenient, and straightforward way to have your loan approved. It removes many of the roadblocks that typically delay home loans, providing a much more reliable process.
And here’s how it usually goes:
- First, you will have to consent to having your electronic data and credit report pulled by the lender.
- Next, your lender will order reports from various vendors who have your credit information.
- Once complete, the lender will submit your file to Desktop Underwriter, the program used to write loans.
- Desktop Underwriter will then validate your information, including the income, assets, and employment status.
- Once the verification is complete, the lender will close on the loan and deliver it to Fannie Mae. This is when the lender receives Day 1 Certainty for the income, assets, and employment.
- Finally, the lender completes the loan in an efficient and effective manner.
The automated pre-verification process is really where borrowers and lenders see the greatest advantage. It gives lenders greater efficiency, so they can provide loans quickly, and also ensures accuracy so risk is reduced. This reduction in risk allows lenders to write more loans for their customers, allowing homeowners to access affordable financing that may not otherwise be available; at least, not as quickly.
Helping You Find the Right Financing
You deserve an affordable mortgage loan, and our staff would be proud to help you find affordable financing for your home purchase. Work with us and take advantage of our common-sense approach to mortgage approval. From using the latest technologies to providing outstanding service, we are here to improve your overall buying experience!
