Everything you need to know about mortgage underwriting

If you are applying for a conventional loan, your credit score should be somewhere around 620, but the minimum score you will need depends on the type of loan you are pursuing. The minimum credit score for an FHA loan is 580, although there is no minimum for VA loans, but individual lenders might set up their own minimum requirements.

To look at your credit usage, payment history, and the age of your accounts, your underwriter will also pull your credit report, which will provide the underwriter with your debt-to-income ratio (DTI).

Asset information. Since they can be sold for money if you default on your mortgage payments, your assets will help you receive mortgage approval. To gather asset information, your underwriter may look into your savings and checking accounts, stocks, personal property, and real estate. Lenders also use assets to make sure that you can make your monthly mortgage payment after you pay closing costs, since closing can range from 3-6% of the loan price.

How long does it take for the underwriter to make a decision?

Since each situation is unique, your mortgage underwriter could take a few days or several weeks to reach a decision. It is common for the underwriting process will take three to six weeks. Missing documentation or signatures, or issues with the title insurance or the appraisal, are just a few factors that can delay the process. In other words: the sooner the underwriter has all the necessary documents, the sooner the mortgage application can be processed—so it is critical to get everything to the lender as soon as possible. 

What to do while waiting for the decision

The bottom line: be patient while waiting for the decision and ensure the correct documentation and signatures have been submitted. While your loan is being processed, make sure to keep your debt in check; stay in touch with your lender; and always—always—be honest and up front regarding your finances.