Mortgage Process

What Exactly Does an Underwriter Do?

Although you’ll most likely never meet them, the underwriter is probably the most important person in the home loan process. If you don’t get an underwriter’s approval, you don’t get a mortgage. It’s the underwriter’s job to look over the figures, double check the documentation, and confirm that you are stable enough to pay off your mortgage. They can either approve, decline, or suspend your mortgage.

Approval, Declination, and Suspension

Should the underwriter choose to approve you for a mortgage, you will receive documentation specifying the conditions which must be met. In the unfortunate situation where your application is declined, you’ll most likely need to seek approval for a new loan program, or perhaps a new lender entirely. If the underwriter decides to suspend your loan, there is still hope. You will probably be required to submit further documentation to prove eligibility.

What do Underwriters Assess

In short, underwriters check what is referred to as “The 3 Cs.” The 3 Cs are credit, capacity, and collateral.


This refers to the behavior of your payment patterns. This is arguably the most important factor in determining if you are eligible for mortgage or not. Your current credit score will be assessed, as well as your credit history. This is to ensure that your bills are paid on time, and you don’t have any significant debt that will prevent you from making your payments. Although there are loan programs that can assist borrowers with a lower credit score, consider taking steps to improve your credit score before applying for a mortgage.


Capacity is the likelihood that you will pay back the money you borrowed. Lenders want to be sure that the money they lend you will be paid back. To confirm this, the underwriter will check your employment history, bank statements, and reserve cash. This will help tell the lender how much money you make, and the likely hood of repayment.


Collateral refers to the value of the house. Unfortunately, there isn’t much you can do with regard to collateral. The home appraiser will determine the total value of the property. This is then analyzed by the underwriter to determine the loan-to-value ratio. It’s the underwriter’s job to make sure the value of the property is appropriate for the type of loan requested.


Regardless of who your lender is, you’ll be required to present a variety of documentation. Each lender has different guidelines, but in general, you’ll be asked to provide pay stubs, w-2s, tax returns, and asset statements. Chances are you will have to provide much more than this.

What You Can Do

There are a few things you can do to help facilitate the application process, but the best thing you can do is fulfill your lender’s requests as quickly as you can. As the underwriter reviews your paperwork, chances are they’ll need something else. The underwriter will proceed to contact the processor, who will contact the originator, who will let you know that more documentation is needed. The quicker you provide that documentation, the quicker the underwriter will have a decision. Sources: