Home Technology The Loan Underwriting Process: How Long It Takes And Everything In Between

The Loan Underwriting Process: How Long It Takes And Everything In Between

loan underwriting process

A loan underwriter will help you in thick and thin while you apply for the loan application.


When purchasing a new home, a mortgage underwriter will perform the loan underwriting process and examine the risk level to decide if your loan application should be approved or not. The procedure takes place behind the scenes after you submit the application to the lender. The final decision will in all find out if you qualify for the home loan and fulfill the set eligibility criteria.

What do you understand by mortgage underwriting?

If you are purchasing a home for the very first time, you will experience the mortgage underwriting process. This is where the lender/bank will examine the risk- that is whether or not you will be able to repay the loan during the given time frame. In addition to this, as a homeowner you will be asked to provide all the vital documents to the lender. These documents consist of identification proof, income proof, credit report, and other statements. After verifying all these documents, the lender will take a call.


Who is an underwriter and what do they precisely do?

The underwriters will evaluate the application of the borrower and find out his/her creditworthiness. In addition to this, the lender will also check whether or not the borrower will be able to repay the loan without creating issues for the lender. Basically, you will come across two different lenders, manual and automatic. The manual underwriter will handle the whole procedure in person. On the other hand, an automatic underwriter will handle everything by using a lending software. It can either be residential or the best commercial lending software. Even though the automatic underwriting procedure is faster as compared to the manual one, it is not at all convenient. However, there are some lenders who use the combination of both and then make a final call.


Steps in mortgage underwriting process

  • Get prequalified: Before you start seeking a house, it is essential to get prequalified. This way you will be able to find out how much mortgage you should seek and how much rate of interest you can receive. All the financial requirements will be taken into consideration and then the further steps will take place. Provide the below listed documents to the lender.
  1. Identification card
  2. Bank statements
  3. Credit report
  4. Social security card


Once you prequalify, it does not mean your loan application will be approved. The prequalification only helps you select a property that fits your budget.

  • Complete the mortgage application: Next step is to complete your mortgage application and get everything verified by the lender. If everything happens in the right manner, your lender will approve you for a certain loan amount and the further procedure will take place.

  • Make an offer for the home: Now that you have the pre approval letter in your hand, it is time to seek a property which is suitable to you. Once you find it, you will be eligible to make an offer for the sellers.


Lastly the decision will be taken by an underwriter and you will be able to purchase the property.