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5 Incredible Benefits of Automated Underwriting System

oliviabaker November 4, 2020

Automated underwriting holds the potential to smoothen the loan process for better decisions, but many lenders do not acknowledge its capabilities. If you are not using an automated underwriting system yet, learn the platform’s benefits and understand how powerful underwriting can speed up all aspects of loan decisioning. 

Underwriting is an integral part of a lending process. In simple words, it is a method used by a lender to verify a potential borrower’s income, property, and assets before offering a loan. Underwriting occurs behind the scene, but a lender may contact an applicant for documents and additional details.

Collecting documents and examining them is a time-consuming process, which may also affect the time for loan approval. Apart from that, humanized mistakes can complicate it. Several lenders use an automated underwriting system to speed up the process and eliminate the risks of errors.     

What Does an Automated Underwriting System Do?

Earlier, underwriting was done by an underwriter, an expert who looked at possible risks while offering a loan to an interested party. The professional considered an applicant’s credit history, verified income, ordered an appraisal, and looked at savings accounts to make a decision. With a human in charge, it was a lengthy and time-consuming process. Today, a computerized underwriting system is used to quickly perform an underwriter’s job and make informed decisions.

Benefits of an Automated Underwriting System

  • It Speeds Up the Loan Process

A technology-powered underwriter allows lenders to make better decisions quickly. The underwriting system checks information on applicants automatically. It comes with many built-in tools to gather data on an applicant’s credit history, income, and assets. 

  • It Helps Manage Various Aspects of Loan Decisioning 

An automated system collects not only essential information on potential borrowers but also manages several other aspects of a loan process. They include risk customization, bank account insights, automatic data reports, risk alerts, smart AI uploads, financial spreading, etc. 

  • It Reduces Risk of Errors

An underwriting system automates the process while eliminating the risks of errors, which are common when underwriting is handled completely by humans. Also, a computerized system includes features like red flags and red alerts to spot issues quickly. 

  • It Increases Productivity

A credit underwriting system reduces manual work and provides lenders with an automated methodology that doesn’t depend on human efforts for its working. Lenders can assign other tasks to their experts and increase their productivity. 

  • It is Safe and Convenient

An automated underwriting system is a secure, effective, and easy-to-use way to quickly perform the underwriting process. Only authorized members can access the platform and use its tools to make informed decisions. 

In the End

An automated underwriting system makes the underwriting process fast and error-free for lenders. Using the computerized systems, lenders can make informed credit decisions, speed up closing, and reduce risks. Also, the powerful technical tool provides credit officers with a 360 view to make quality deals. On the other hand, the system elevates the customer experience by helping them get the loan quickly. In this way, the automated system handles all the aspects of an underwriting process and gives lenders peace of mind.    

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