Underwriting
Underwriting is where the approval decision is ultimately made. The underwriter reviews all of your application materials making sure everything conforms to the lender's guidelines for a mortgage loan. The lender establishes its guidelines based on several factors that contribute to the risk of making the loan: the size of the loan; the value of the home; the type of the home (single family; condominium; manufactured home, etc); your intended use of the home (owner occupant, second or vacation home; income property); your credit history; your monthly debt obligations; your monthly income; your employment history; local property market factors; etc. It is becoming increasingly common for lenders to employ automated underwriting. A computer applies the lender's decision rules to the supplied information to make an approval recommendation. An underwriter focuses on those loan applications where the decision is not clear-cut.