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What is an underwriter in real estate?

Approved loan application Home buyers, homeowners, and real estate investors who seek a loan are evaluated by an underwriter. Think of the underwriter as the umpire for the bank or mortgage company. He or she determines the financial risk of the mortgage applicant(s) and whether the property is acceptable collateral for the loan. The underwriter is the person who approves or denies a mortgage application.

The underwriter verifies the property details from the real estate appraisal. The underwriter then analyzes the borrower's income, assets, and debt to determine whether the applicant meets the lending guidelines.

At one time all real estate applications were evaluated exclusively by an underwriter, however, sometime in the 90's, computer software began analyzing mortgage applications. Automated underwriting as it's known, interfaces with either the Federal National Mortgage Association or Federal Home Loan Corporation's computer to evaluate the loan application. Automated underwriting speeds up the underwriting process. Read more about automated underwriting

Rotating question markFrequently Asked Questions About Mortgage Underwriting

Q. Can underwriters make exceptions?
A. Most underwriters are allowed to make exceptions, however, if the loan results in default, the underwriter could find himself or herself on the hot seat.

Q. Can you switch lenders during underwriting?
A. You can switch lenders at any time during the loan process, but keep in mind that you will be starting from scratch with another lender.

Q. Do lenders verify employment after closing?
A. Not usually

Q. Do mortgage companies check credit after closing?
A. Not usually

Q. Do mortgage companies verify employment after closing?
A. Probably not

Q. Do underwriters want to approve loans?
A. Underwriters want to approve loans, after all, approved loans means profit for the company, which means continued employment

Q. Do underwriters work on Saturdays and Sundays?
A. During high volume times, underwriters will come into the office on the weekend.

Q. Does appraisal happen before underwriting?
A. Yes

Q. How do I know if my mortgage will be approved?
A. Ask the loan officer to submit your application through the automated underwriting system

Q. How do mortgage lenders verify income?
A. Lenders will mail employment verification letters to employers

Q. How do underwriters find judgements?
A. Judgements can be found on an applicant's credit report

Q. How do you know when your mortgage loan is approved?
A. The mortgage company will mail an approval letter

Q. How long does it take an underwriter to approve a mortgage?
A. An underwriter will take about one hour to thoroughly review a loan application, however, the time period is dependent on the overall condition of the application. Missing documents will cause a loan application to be suspended (on hold) until all documents are included in the file

Q. How long does underwriting take for a home loan?
A. Underwriters usually need one-half to one hour to review a loan application, but the loan application might be behind any number of other applications seeking approval.

Q. What are mortgage-loan conditions?
A. It's not uncommon for underwriters to request additional information from the applicant or the appraiser prior to loan approval. The loan is approved subject to satisfying the specified loan conditions