Mortgage Underwriting Guidelines

How To Become A Mortgage Underwriter

What Does A Mortgage Underwriter Do?

Essentially, a mortgage underwriter reviews an applicant's financial condition to assess how much risk a lender will take on if they decide to approve a loan.

To start, the Mortgage Underwriter verifies the borrower's income, assets, and debt, then reviews the borrower's credit scores and tax returns to approve or decline mortgage applications. As part of their process, a Mortgage Underwriter reviews bank statements for sources of funds, tax returns to see sources of income, credit card expenditures, a title search, and the property appraisal to determine risk.

The Mortgage Underwriting Process

As mentioned above, the Mortgage Underwriter's job is to assess the overall risk that the borrower would not repay the mortgage.

According to Fannie Mae's underwriting guidelines, a lender typically requires the following to approve a mortgage:
  • Maximum loan-to-value (LTV) ratio of 95 percent
  • Credit score of 680 or higher
  • Maximum debt-to-income (DTI) ratio of 36 percent
...but if an applicant falls short in one area, the loan might still be approved based on the strength of certain factors, including:
  • Financial reserves
  • Type of property and how many units it has
  • Whether you will occupy the property
  • Amortization schedule
So, if you had a worse DTI - say 40 percent - you might get approved for a mortgage as long as you had a better credit score. Or, if your LTV ratio was better than 75 percent, you might be able to get mortgage approval even with a credit score lower than the 680 basis.

To really get a handle on how mortgage underwriting works, you'll want to master the mortgage underwriting process. At The Mortgage Training Center, we offer online training, self-study training, and webcasts to help you learn about the mortgage underwriting process.

About Our Mortgage Underwriting Training Courses

Understanding the mortgage underwriting process means you have to really get a handle on mortgage underwriting guidelines. These mortgage underwriting guidelines are the "keys" to unlocking your mortgage loan approval. Some of the mortgage underwriting guidelines deal with:
    FHA/VA Underwriting For Underwriters
  • Debt ratios
  • Loan to value
  • Employment
  • Credit
  • Income documentation
  • And many other important points
Luckily, the Mortgage Training Center has a variety of mortgage underwriting training courses that you know how mortgage underwriting works.

Find Mortgage Underwriting Courses

To search for training on mortgage underwriting guidelines or the mortgage underwriting process, you can choose one of our recommended courses below, or you can select "Underwriting" and your resident state from the "Professional Development" section of the search box below.

Top FAQs

A loan underwriter assesses the risk of lending money for a home, car, or debt consolidation.
A mortgage underwriter evaluates the applicant's credit history, assets, the size of the loan, then uses this info to dertermine if the applicant can pay back the loan.
While the Mortage Loan Office must be licensed, mortgage underwriters do not need a mortgage license.
Depending on where you live, loan underwrites can expect to earn $100,000 or more.
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