Mortgage Underwriting
How lenders review the borrower, property, documentation and proposed mortgage transaction.
Underwriting is the structured review used to determine whether a loan file meets the selected program's requirements. The exact documents and standards vary by lender, program, property and borrower profile.
Credit and payment history
Where applicable, an underwriter may review credit reports, housing history and other evidence of financial obligations. Foreign National and alternative-documentation programs may use different methods when a traditional U.S. credit profile is unavailable.
Capacity and documentation
Depending on the program, capacity may be evaluated with income, employment, bank statements, assets, reserves, property cash flow or other eligible documentation.
Collateral and appraisal
The property is reviewed for value, condition, marketability, title and eligible use. An appraisal is one part of that review and is prepared for the assignment defined by the lender.
Assets and closing funds
Funds for down payment, closing costs and reserves generally need to be documented and transferred in a manner accepted by the program and closing parties.
Conditions and final approval
An initial approval may include conditions for additional documents or explanations. Final approval and clear-to-close status occur only after required conditions and closing requirements are satisfied.
Programs and requirements vary by lender, property and borrower profile. This information is educational and is not a commitment to lend.