What Is Mortgage Underwriting?

Written by Kim PinnelliUpdated: 28th Dec 2021
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Mortgage underwriting is scary, right? You hear underwriters, and you cringe. They are out to get you and decline your application, right?


They aren’t as bad as you think. Mortgage underwriters make sure you qualify for the mortgage and aren’t putting yourself in over your head. It’s a lengthy process but one that helps everyone.

Here’s what you need to know if you are applying for a mortgage.

What Is Mortgage Underwriting?

Mortgage underwriting scares most people, and for a good reason – many people get turned down for the loan they want.

But mortgage underwriting is just a verification of your qualifying factors. If you get turned down, it’s because you don’t meet the requirements for the loan, and the underwriter is just doing their job.

Underwriting is just the process of the underwriter asking you for the necessary documentation to prove you can afford the loan and the underwriter evaluating those documents for accuracy and legitimacy.

It can seem overwhelming, but it makes it a lot less stressful once you understand how it works.

>> More: See the Best Mortgage Lenders

How Does the Mortgage Underwriting Process Work?

Underwriters look at a lot of factors when deciding if you qualify for a loan. Here are the basics.

Credit History

Your credit history is the first thing lenders look at. They look at your credit score and your credit history.

They’ll make sure you meet the minimum credit score for the program. They’ll also look for issues within your credit history, including late payments, overextending your credit, or public records, such as foreclosures or bankruptcies.

Underwriters may ask questions about certain information on your credit report or ask for proof that you cleared up certain items.

Employment History

Underwriters verify your employment history. They’ll ask for proof of your employment for the last two years and will likely ask for a written or verbal verification of your employment with your current employer.


The lender will order a home appraisal which tells the underwriter if there’s enough collateral in the home to lend you the money.

The appraisal shows the home’s fair market value and determines if the home meets the specific loan guidelines. For example, FHA Loans and VA Loans have different requirements.


Your income is the pillar of your loan approval. If you have the credit score needed, next online mortgage lenders determine if you make enough money to pay the loan back.

They look for stable and consistent income. They’ll look back over the last two years to see your income stability and to determine if there are any ‘downtimes’ when you may not have been able to afford the mortgage.


Underwriters must verify that the assets you state you own are yours. They’ll ask for bank and investment statements for the last couple of months to verify the information.

If your loan requires reserves (money on hand after you pay the down payment and closing costs), they’ll verify you have that money available in a liquid account.

Mortgage Amount

Lenders come up with a mortgage amount you qualify for based on your income and current debts. They keep your payment within a specific debt-to-income ratio which varies by loan program.

The mortgage amount must fit within the DTI with the current mortgage rates and your current income situation.

Specific Mortgage Type

Every government-home loan and conventional loan program has different requirements. Underwriters compare the loan requirements to your qualifications to determine if they should approve you. Each loan has unique requirements, as does each online mortgage lender, so the underwriting requirements vary wildly.

The lender will order a title search which ensures there aren’t any outstanding liens on the property.

The search report goes to the underwriter, who ensures its validity and passes the loan onto the next step.

>> More: What Is Title Insurance?

Down Payment

If your loan requires a down payment, the underwriter will verify you have the money available.

They’ll ask for the last 2 months of bank statements to ensure the money belongs to you and you didn’t take out a loan or receive a lump sum of money from someone to throw into your bank account just to qualify.

What Is an Underwriter?

The underwriter is the person who evaluates all the factors above. The underwriter gathers all the documents after the loan officer requests them from you.

The underwriter then looks at the big picture to decide your risk level and if you meet the loan requirements.

How Long Does Underwriting Take?

Underwriting can take a couple of days to a couple of weeks. It depends on the complexity of the loan and the lender’s workload.

It also depends on how long the appraisal and title search takes, as those are two important factors in the underwriting process.

Tips to Succeed in the Mortgage Underwriting Process

#1. Do Not Apply for Other Credit Lines

Once you decide to apply for a mortgage, freeze everything. Don’t open new credit lines, don’t max out your existing credit lines, and don’t default on your current debts. Keep your credit score and history as stable as possible.

#2. Stay in Your Current Job

Lenders like two-year employment history. Stay at your job until you close on your loan. It may not be what you want, but it will prevent a lot of headaches and potentially decline loans because you changed jobs.

#3. Respond Quickly

Underwriters need responses fast. The longer you take to respond, the more issues that could pop up that limit your ability to secure financing.

#4. Provide All Necessary Documentation

Ask your loan officer upfront what documentation you need. Rather than piecemealing everything together, give the underwriter everything at once. This makes it a lot easier to look at the big picture and make a lending determination fast.

#5. Be Transparent and Honest

Underwriters find everything out – it’s their job. Don’t lie or stretch the truth. Be honest and upfront about anything, even if something bad happens.

Your loan officer may be able to help you work around the issue if you’re honest. If you lie, though, you may find that they decline your loan for fraudulent information.

>> More: How to Choose the Best Mortgage

Can a Mortgage Be Denied During Underwriting?

A mortgage can be denied at any point during the process. If the underwriter comes across something that doesn’t fit the loan requirements, it could cause your loan to be denied. It could be something with the appraisal, title work, or your qualifying requirements.

How Long After Underwriting is Closing?

Most lenders can get you to the closing table within a couple of days after underwriting clears your file. It depends on the lender and their workload, but it shouldn’t take long to get to the closing table. In the meantime, though, make sure that you don’t make any changes to your credit (charge up your credit cards, miss a payment, etc.), change jobs, or make any other drastic changes because the lender will do final verifications before you close.

Bottom Line: What Is Mortgage Underwriting?

Mortgage underwriting is the process every loan application goes through to ensure they can afford the loan they applied for.

It’s a lengthy process but one that makes sure you aren’t taking on more than you can afford and putting yourself at risk of foreclosure.

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Kim Pinnelli
Kim Pinnelli

Kim Pinnelli is a Senior Writer, Editor, & Product Analyst with a Bachelor’s Degree in Finance from the University of Illinois at Chicago. She has been a professional financial writer for over 15 years, and has appeared in a myriad of industry leading financial media outlets. Leveraging her personal experience, Kim is committed to helping people take charge of their personal finances and make simple financial decisions.