Mortgage Blog

Mortgage Underwriter: Who Are They?

Mortgage Basics

When you are starting the mortgage approval process, the thought of a Mortgage Underwriter tearing through your finances can be intimidating. Getting to know the Underwriter’s job and the process they take to approve your loans can help make the process a bit less painful.

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What is Underwriting? 

Underwriting is the process financial institutions measure the eligibility of potential borrowers. They will take an in-depth look at your credit and financial background. The purpose is to determine whether you are a good candidate for a loan. 

What does an Underwriter do?

The Underwriter's job is to review the mortgage applications, know the processing systems for mortgage approval and analyze the loan understanding compensating factors. They are the people that decide whether to approve or deny the loan applications. 

How does the underwriting process work?

The Underwriter’s job is to assess borrower’s risk by reviewing three things: 

Capacity – The Underwriter is trying to determine whether you have the resources to pay off the loan. They will review your employment, income, debt and asset statements. Underwriters dive deep into your finances by looking at your savings, checking, 401k and IRA accounts. Credit – Your repayment and credit history is one of the most important factors in the mortgage approval process. Your credit report will give an Underwriter a preview of how well you paid off car loans, student loans, and other lines of credit. It helps them predict your ability to repay your mortgage on time and in full.  Collateral– The Underwriter also determines the market value of the property you are trying to buy. They want to make sure that your loan doesn’t exceed the property’s value. Lenders wouldn’t be able to recover an unpaid balance, in the case of a default. The underwriter will schedule an appraisal of the home, and the report will assess the home’s worth and protect the lender from lending too much money.

Don't stress over the underwriting process. The Underwriter works closely with your Loan Officer and Processor to help you find a loan program that best fits your needs.