We are an independent, advertising-supported comparison service. Our objective is to empower you to make confident financial decisions by giving you access to interactive tools and financial calculators, publishing original and unbiased content, and allowing you to conduct free research and information comparisons.
Issuers that Bankrate has partnerships with include American Express, Bank of America, Capital One, Chase, Citi, and Discover, among others.
Applying for a mortgage can be a daunting process, especially for first-time homebuyers. The mortgage underwriting process, in which a group of professionals assesses your financial status to decide whether you qualify for the loan, is one of the most enigmatic parts of the procedure.
But what exactly do these underwriters look for? What kind of things do they ask for? And how can you make the process smoother and less stressful?
This article will answer all your questions about the mortgage underwriting process including:
- What is mortgage underwriting?
- What are the steps involved in the mortgage underwriting process?
- What kind of things do underwriters ask for?
- How can you make the mortgage underwriting process smoother?
Additionally, we’ll provide you some useful pointers and strategies to help your mortgage application be accepted swiftly and smoothly. So fasten your seatbelts and get ready to absorb all the knowledge that lies ahead regarding the mortgage underwriting procedure!
What is Mortgage Underwriting?
Mortgage underwriting is the process by which a lender determines whether to approve your mortgage application. This process involves a thorough review of your financial history, including your credit score, income, debts, and assets. The underwriter will use this information to assess your ability to repay the loan and determine the amount of risk involved in lending you money.
What are the Steps Involved in the Mortgage Underwriting Process?
The mortgage underwriting process typically involves the following steps:
- Pre-approval: This is the first step in the mortgage process, where you get a preliminary assessment of how much you can borrow. The lender will review your basic financial information and give you an estimate of your loan amount and interest rate.
- Application: Once you’ve found a home you want to buy, you’ll need to submit a formal mortgage application. This application will include detailed information about your income, debts, assets, and employment history.
- Verification: The lender will verify the information you provided in your application. This may involve contacting your employer to verify your income, obtaining your credit report, and reviewing your bank statements.
- Appraisal: The lender will order an appraisal of the property you’re buying. This will determine the fair market value of the home and ensure that the purchase price is in line with its value.
- Underwriting decision: Once all of the information has been verified, the underwriter will make a decision on your loan application. They may approve your loan, deny your loan, or request additional information.
- Closing: If your loan is approved, you’ll need to attend a closing meeting to sign the final loan documents and receive the funds to purchase your home.
What Kind of Things Do Underwriters Ask For?
Underwriters typically ask for the following information during the mortgage underwriting process:
- Personal information: This includes your name, address, Social Security number, and date of birth.
- Income information: This includes your pay stubs, tax returns, and W-2s.
- Debt information: This includes your credit card statements, student loan statements, and auto loan statements.
- Asset information: This includes your bank statements, investment statements, and retirement account statements.
- Employment information: This includes your job title, employer name, and contact information.
- Property information: This includes the purchase price of the home, the address, and the property type.
The specific information that underwriters request may vary depending on the lender and the type of loan you’re applying for. However, the information listed above is typically required for most mortgage applications.
How Can You Make the Mortgage Underwriting Process Smoother?
There are a few things you can do to make the mortgage underwriting process smoother and less stressful:
- Gather your documents in advance: This will save you time and prevent delays in the process.
- Be honest and accurate: Don’t try to hide any negative information from the underwriter.
- Respond promptly to requests for information: The faster you respond, the faster the underwriter can make a decision on your loan.
- Work with a reputable lender: A good lender will have a team of experienced underwriters who can help you through the process.
You can improve your chances of having your mortgage application accepted swiftly and simply by paying attention to these pointers.
Additional Resources
- Chase Bank: What is a mortgage underwriter?
- Bankrate: The Mortgage Underwriting Process
- NerdWallet: What is a mortgage underwriter?
Frequently Asked Questions
- How long does the mortgage underwriting process take?
The mortgage underwriting process typically takes 10-15 business days. However, it can take longer if the underwriter needs additional information or if there are any delays in the appraisal process. - What can I do to improve my chances of getting approved for a mortgage?
There are a few things you can do to improve your chances of getting approved for a mortgage, such as improving your credit score, paying down debt, and saving for a down payment. - What happens if my mortgage application is denied?
If your mortgage application is denied, you can try to get it approved by another lender. You can also try to improve your credit score or save for a larger down payment before reapplying.
Although the mortgage underwriting procedure can be intimidating, it’s a necessary step in the approval process for a home loan. You can ease the process and reduce stress by being aware of what underwriters are looking for and taking the necessary preparations.
How We Make Money
The offers that appear on this site are from companies that compensate us. Unless our mortgage, home equity, and other home lending products are specifically prohibited by law, this compensation may have an impact on how and where products appear on this website, including, for example, the order in which they may appear within the listing categories. However, this payment has no bearing on the content we post or the user reviews you see here. We do not include the universe of companies or financial offers that may be available to you.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Heres an explanation for . Bankrate logo.
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve upheld this reputation for more than 40 years by assisting people in making sense of the financial decision-making process and providing them with confidence regarding their next course of action.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of the content we publish is objective, accurate, and reliable because it is written by highly qualified professionals and edited by subject matter experts.
In order to give you peace of mind when making decisions as a buyer and homeowner, our mortgage reporters and editors concentrate on the topics that matter most to consumers: the newest rates, the greatest lenders, navigating the homebuying process, refinancing your mortgage, and more. Bankrate logo.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our goal is to give readers reliable, unbiased information, and we have established editorial standards to make sure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU — the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. Thus, you can be sure that the information you’re reading, whether it’s an article or a review, is reliable and reputable. Bankrate logo.
What does a mortgage underwriter do?
A mortgage underwriter primarily decides how much risk the lender is assuming if it approves your loan. The underwriter assesses your financial situation and your ability to make timely loan repayments in order to achieve this goal.
A mortgage underwriter will:
- Look at your credit history. An examination of your credit report, credit score, and payment history is part of this.
- Examine your finances. Lenders use certain guidelines as a basis for financing. For example, under Fannie Mae’s conventional loan guidelines, all borrowers must have a minimum credit score of 620, a maximum debt-to-income (DTI) ratio of 36 percent, and a maximum loan-to-value (LTV) ratio of 97 percent. The lender may supplement these with its own criteria. It’ll also look at the particulars of your financial situation. For example, it might take into account your savings, investments, or assets; if it’s an income-producing property, it might also take into account whether you plan to live there with tenants.
- Order a property appraisal. Your application for a loan will be granted primarily based on how much you want to borrow compared to the price of the house you are purchasing. To determine whether the asking price is reasonable given the property’s estimated value, an underwriter will request an appraisal.
- Make the decision. Once all the reports and paperwork are in, the mortgage underwriter will decide whether to approve or deny your application.