How to Understand the Mortgage Underwriting Process

The mortgage underwriting process requires a considerable amount of paperwork.  First there is the application form, which asks for detailed information about you, your residential history, your employment history, credit and savings history, the house you want to purchase, etc. The lender requires  documentation verifying all of your personal finances–your earnings, your monthly expenses, and  debts. All of this information is to verify your ability to repay the mortgage.  Be prepared to supply a large amount of documents .

Your file is then assigned to a mortgage loan processor who pre-reviews all of the documentation you provided along with outsourcing some additional forms to verify the evidence. A review of your credit history and credit scores are pertinent to this process because it determines the program you are eligible for and verifies the ability to repay the mortgage based on the terms of the program. Make sure your credit file is accurate before applying for a mortgage.  An appraisal is then obtained to evidence the value of the home and the marketing conditions of the area and location of the property.  The lender must be willing to grant a loan based on the report of the marketing conditions of the property.

Once the processor has reviewed and verified all pertinent documents and information, the file is packaged up and assigned to a mortgage loan underwriter.  The mortgage underwriter is the final decision maker in the approval process. He/She will thoroughly review documents, guidelines and input numbers into an underwriting software system in order to give final approval or denial on the mortgage loan.  Many loans are approved with conditions which means as long as you can supply additional documentation based on their review they will grant a final approval. This process can take from one hour to a few days depending on the supply and demand.  Typically when the loan is approved there are conditions to the approval.  Once the conditions are cleared you are ready to go to settlement.  If the mortgage loan is denied, you you should receive a call from the mortgage processor assigned to your file.  You will also receive a denial in the mail along with reasons for denial.  Knowing these reason will help you to improve the issue so you may look forward to an approval at a later date. If you feel you have been wrongly denied which does happen in many cases, that’s where we can help. You can email us by clicking on “contact us” and email us your story and why you feel you were wrongly denied.  In many cases, if you know your program and the guidelines to that program and you feel you met the criteria, you may have a case to challenge the mortgage underwriter.