--- title: What Is Mortgage Underwriting? description: The mortgage underwriting process helps a lender determine your creditworthiness for a mortgage loan and how much of a risk you pose as a borrower. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 601 covers: - Mortgages - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Kaitlin Mulhere role: Editor url: https://money.com/author/kaitlin-mulhere/ bio: Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more. education: University of Florida at_money_since: 2015 articles: 217 covers: - Mortgages - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Personal Finance - Retirement - Shopping - Taxes social: - https://twitter.com/KMulhere - https://www.linkedin.com/in/kaitlin-mulhere-64503048/ published: '2023-12-22T18:15:13.000Z' modified: '2024-01-05T22:16:47.000Z' section: Mortgages word_count: 973 canonical: https://money.com/what-is-mortgage-underwriting/ type: Article source: structured-blocks --- > **Disclosure:** We may earn a fee if you click on the links below. Compensation does not determine ranking. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![What Is Mortgage Underwriting?](https://img.money.com/2023/12/Explainer-Mortgage-Underwriting.jpg?quality=85&w=1012&h=569&crop=1) * * * Will your mortgage application be approved? That depends on the outcome of mortgage underwriting. Mortgage underwriting is a crucial step of the homebuying process in which [mortgage lenders](https://money.com/best-mortgage-lenders/) decide whether to finance a home purchase. While prequalification and [preapproval](https://money.com/how-to-get-preapproved-for-a-home-loan/) can give you a sense of [how much house you can afford](https://money.com/how-much-house-can-i-afford/) and what your [mortgage rate](https://money.com/current-mortgage-rates/) might be, nothing is guaranteed until you go through loan underwriting. Mortgage underwriters look at many aspects of your finances, including your credit report, income and debts. To give your lender a complete review of your financial situation, you’ll often need to submit a large number of documents, including pay stubs, tax forms, bank account statements, credit card statements, loan documents and proof of your investments. The underwriter’s job is to assess your profile and weigh it against the home loan you’re requesting. Lenders are also very focused on the appraisal, which can make or break a loan eligibility decision for those buying or refinancing homes. ## Table of Contents - [How does mortgage underwriting work?](#How-does) - [How long does mortgage underwriting take?](#How-long) - [What documents do mortgage underwriters need?](#What) - [Steps to the mortgage underwriting process](#Steps) - [Factors that a mortgage underwriter considers when reviewing a mortgage application](#Factors) - [FAQs about mortgage underwriting](#FAQ) ## How does mortgage underwriting work? During this process, mortgage underwriters conduct a thorough review of your loan application and assess the risk of lending you money. A person will typically finalize the mortgage loan decision, but much of the mortgage approval process is handled by underwriting software. Lenders use formulas to help them assess the risk of giving you a loan. This involves reviewing your finances, the value of the home and the loan details. The appraisal is extremely important in mortgage underwriting because lenders don’t want the loan amount to be higher than the appraised value of the home. If it looks like you’re overpaying, your loan application is much less likely to be approved because the lender won’t be able to recoup all their money if you’re unable to make your mortgage payments. A large [down payment](https://money.com/how-to-save-for-a-down-payment/) can potentially help buyers overcome a situation in which the appraisal is lower than expected relative to the loan they’re requesting. If not, the seller may have to come down on price if they want to close with that buyer. ## How long does mortgage underwriting take? Waiting for a decision on your loan is stressful, and it can be hard to be patient while you wait for such a consequential decision. According to [Realtor.com](https://www.realtor.com/advice/finance/how-long-does-underwriting-take/), mortgage underwriting may only take 2 to 3 days on the low end, but it’s more commonly about a weeklong affair. To speed up the process, make sure you provide all the correct documents that are requested of you. The amount of time it takes can also depend on the quality of your application. If you have a perfect credit history and high income and you’re trying to [buy a home](https://money.com/how-to-buy-a-house/) that’s well within your budget, things may move quickly. If your application presents a harder decision for the underwriter, it could take longer. ## What documents do mortgage underwriters need? The exact list of documents varies by lender and can also depend on the type and size of the mortgage you’re pursuing. Usually, mortgage applicants will get a checklist of everything they need to provide. These are some of the most common requests: - Pay stubs - Identification documents and Social Security number - W-2s - 1099 forms, if applicable - Tax returns - Bank statements - Investment account documents: 401(k)s, IRAs, brokerage accounts, etc. - Loan documents and/or account info: Auto loans, student loans, personal loans, etc. ## Steps to the mortgage underwriting process After you’ve gone through the loan application process and submitted your documents, the mortgage underwriter will go through several steps to determine whether to give approval. They’ll verify your documents and try to ensure there are no signs of [mortgage application fraud](https://money.com/what-is-mortgage-fraud/); they’ll conduct a comprehensive assessment of the borrower's financial information; and they’ll make a risk evaluation about approving the loan. (Note: The underwriter does not set your interest rate or monthly payments, they’re only determining mortgage approval.) Two other key parts of the process are the appraisal and the title search. The lender usually sends out an appraiser shortly before underwriting or during underwriting. The appraiser’s job is to use their expertise to assess the value of the property and report that back to the lender for consideration. The title search, which can also be performed during underwriting, is the process in which the lender ensures there are no competing ownership claims on a property, no liens and no unpaid taxes. Finally, using formulas and calculations, the mortgage underwriter will come to a decision. The possible outcomes include approval, conditional approval, denial or suspension (which usually means documents were missing). Conditional approval indicates you’re on the right track, but you may need to go through a few more steps to get approved, like sending additional documents. Once you have final approval, you’re “clear to close.” ## Factors that a mortgage underwriter considers when reviewing a mortgage application In terms of assessing a buyer’s ability to afford a mortgage, lenders are generally looking at many of the same factors they would for any other type of loan, like an auto or personal loan application review. Here are some of the criteria: - Income and employment history (including any self-employed income) - Credit: Payment history, credit score, etc. - Debt obligations, debt-to-income ratio (DTI) and financial liabilities - Assets: Retirement accounts, brokerage accounts, savings accounts, etc. Your profile is measured against the terms of the loan you want. That means the underwriter cares a lot about the size of your down payment and the cost of the home. They’re also trying to determine if it’s a quality piece of real estate at a fair price, and the title search and the appraisal factor into that assessment. ## Buying a home doesn't have to be hard. Let Rocket Mortgage (NMLS #3030) experts guide your every step. ### Consulting with a mortgage expert is a smart way to get all the facts and make a well-informed decision. Click below and book it now. [View Rates](https://money.com/pr/q0ba5704b09e?ap_referrer=%2Fwhat-is-mortgage-underwriting%2F) ## FAQs about mortgage underwriting ### Who does the underwriting for a mortgage? Mortgage underwriting is handled by the lender. Part of the process can be done by automated underwriting software tools, but a human underwriter is almost always involved as well. This is called “manual underwriting.” ### How much are mortgage underwriting fees? The fees for mortgage underwriting are considered part of closing costs, which also include fees for the appraisal, title services and loan origination. Closing costs typically total between 3% and 6% of the mortgage amount, but the underwriting fee is just a small fraction of that. It could be a flat fee in the ballpark of $500 to $1,000 or a percentage of the loan amount. The fees are the same or similar for homeowners going through mortgage refinance underwriting. ### How long does mortgage underwriting take? From start to finish, underwriting usually takes about a week. It could take slightly longer than that or as little as 2 to 3 days depending on the complexity of the application and other factors. ![](https://s3.consumersadvocate.org/prd/image/image/26681/medium_57f09f10-efb8-487d-a73e-5f7d605144eb.png) Imagine finally owning your dream home — Rocket Mortgage (NMLS #3030) can help! 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