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What Does an Underwriter Look At?


When applying for a home loan, a term you'll hear often is "underwriter." The title may not sound imposing, but an underwriter can determine whether your mortgage gets approved, suspended, or declined. Underwriters work for banks, lenders and mortgage bankers. And thought you'll never see or meet the underwriter, it's important to have all your bases covered and paperwork in order to get your loan approved.

How does an underwriter determine the outcome of an application?

Simply put, the underwriter looks at the "three C's" - credit reputation, capacity and collateral.

Credit reputation is your past credit history, including any foreclosures, bankruptcies, and your willingness to pay debts. Usually these discrepancies will be reflected in your three-digit credit score, which may eliminate you from a mortgage loan automatically, if your number is lower than a certain threshold.

Capacity reflects your actual ability to repay a loan. This is where debt-to-income ratio come in to play. It also takes in to account the terms of the loan, whether it's interest-only, or adjustable- or fixed-rate. The underwriter wants to know you'll be able to repay the loan before granting approval.

Collateral refers more cut-and-dry figures, such as the down payment on the home, property type, and loan-to-value ratio. Because the home becomes property of the lender if you can't make your mortgage payments, the underwriter needs to know exactly what the worth is of the home being purchased.

The "three C's" aren't the only thing an underwriter looks at. They'll also verify your employment and salary information, and review the appraisal of the home to ensure accuracy and thoroughness. It's the underwriter's responsibility to make sure all tax, title, insurance and closing documentation is in place.

The underwriter has final approval of your loan, because they ultimately have responsibility for it. If an underwriter approves a loan that the buyer can't pay, it can result in large costs to the lender. Working with a trusted lender can help the underwriting process move smoothly and get you the mortgage you need for your next home.

Citywide Home Loans make the loan process simple. Visit to see how much home you can afford and find a loan program that's right for you.