The process by which a lender evaluates a loan application to decide whether to approve it, what rate to offer, and what conditions to attach.
Full Definition
Mortgage underwriting is the comprehensive review of a borrower's financial profile — income, assets, credit, employment history — and the property being purchased. An underwriter (a person or automated system like Fannie Mae's Desktop Underwriter) determines whether the loan meets program guidelines and poses acceptable risk. The underwriter may issue an approval, a conditional approval (requiring additional documents), or a denial. Common underwriting conditions include explanations for large bank deposits, updated pay stubs, or a letter of explanation for a credit inquiry. Once all conditions are cleared, the loan receives a final 'clear to close.' Turnaround times range from 24 hours (automated) to 2 weeks (complex files).
Related Terms
Whether you're buying a home or building a mortgage career, Lend Loft has the tools, training, and licensed support to get you there.