How long does underwriting take?

To finance or refinance a home, you’ll need to go through a mortgage approval process known as underwriting. Underwriting can take anywhere from a day to several weeks, depending on factors like the complexity of your finances and how busy the underwriter is. 

To help underwriting go as smoothly and quickly as possible, you can take steps like preparing your financial documents before you apply and addressing potential issues before they arise. 

What is the underwriting process and what does it involve? 

During underwriting, lenders determine if you can afford the loan you’re applying for and if the home you’re purchasing meets the requirements for your desired loan type. To do this, underwriters verify your employment, income, assets, debts, and credit history by closely examining documents you submit with your application. 

Documents an underwriter might request from you, as well as any co-borrowers, include:

• Pay stubs
• W-2s
• 1099s
• Federal tax returns
• Bank statements
• Proof of down payment source
• Investment summaries
• Driver’s license or state ID
• Housing counseling or homebuyer education certifications (if applicable)
• Social security number

Automated underwriting vs. manual underwriting

There are two main methods of underwriting: automated underwriting and manual underwriting. Automated underwriting is done by running your application and documentation through a computer program, while manual underwriting is completed by a human. 

Which method of underwriting your lender will use varies, with some lenders using both depending on the loan they are underwriting. 

How long does underwriting take? 

According to Realtor.com, the average time to get a mortgage is 30 days. However, underwriting a mortgage can take days or weeks, with varying timelines based on factors like the underwriter’s schedule, the complexity of your finances, and lender policies. 

What are the steps in the underwriting process? 

Underwriters often break the underwriting process down into three steps, commonly referred to as the “three Cs of underwriting:” credit, capacity, and collateral. 

1. Credit

The first step in the underwriting process is evaluating your credit, which will give the underwriter insight into the type of borrower you are. Your underwriter will do a hard pull on your credit and take note of details like:

• Your credit score
• Your payment history
• Whether you have outstanding debts
• If you’ve ever declared bankruptcy
• If you’ve been foreclosed on
• The length of your credit history

Next, the underwriter will compare these details against your lender’s requirements. If you meet them, the underwriter will move on to the next step. 

2. Capacity

When considering your capacity to take on a home loan, underwriters look at your:

• Income: Underwriters want to see that you have a stable income that is capable of supporting monthly mortgage payments. They will verify your income by reviewing pay stubs, tax returns, bank statements, and any other proof of income you provide. 
• Employment: Underwriters check to make sure you are employed and not at risk of losing your job, often going as far as to call your employer and ask for verification. 
• Debt-to-income ratio (DTI): Your DTI measures the amount of income you have compared to your debt. This figure will help underwriters understand whether you can manage monthly mortgage payments in addition to your current financial obligations. 

3. Collateral

The collateral portion of the underwriting process focuses on the assets you already own. This will help your underwriter determine whether you have enough money to cover your down payment and closing costs. Your assets might include:

• Savings accounts
• Other properties
• Investments
• Pensions
• Cash

Next, your underwriter will consider the appraised market value of the home you want to purchase or refinance, which will act as collateral for your loan. 

What factors can delay underwriting? 

Delays in the underwriting process are sometimes in your control and sometimes in the hands of the underwriters. Some common causes of delays in the process are:

• You didn’t complete the paperwork properly
• The underwriter needs more information
• The underwriter has a busy schedule
• The appraisal process is delayed
• There are issues with the down payment source
• You don’t have a high enough income
• Your credit history is poor

How to speed up the underwriting process 

Although much of the underwriting timeline is out of your hands, there are a few ways you can speed up the process. 

Work with a loan officer

Loan officers can work alongside your lender's underwriter, giving you advice on the types of loans you might qualify for and answering any questions about the application process. Since they specialize in helping you get your loan approved, they can be a major asset if you want to complete underwriting quickly. 

Prepare documents ahead of time

The best way to speed up underwriting is to prepare for it as early as you can. Compile all the documents that your underwriter will need before you even apply for a loan. If you’re working with a loan officer, they can give you a list of your lender’s specific requirements.

Anticipate questions from your underwriter

You can also speed up the underwriting process by anticipating questions your underwriter might have and providing them with additional documentation. For example, if you receive a cash gift toward your down payment, you should include a signed statement from the person who gave it to you explaining that it was a gift. 

Opt for automated underwriting

Automated underwriting tends to come with quicker turn times. This is because, unlike manual underwriting, a human doesn’t have to evaluate every detail of a person’s application and financial profile. Fortunately, automated underwriting is becoming more common. 

What happens after underwriting? 

After underwriting, you’ll receive a decision on your loan. This can come in three different forms: an approval, a denial, or a conditional approval. If you’re approved, you’ll receive a formal mortgage offer and be able to schedule your closing date. 

A conditional approval means you meet the requirements for approval, but you’ll need to meet the lender’s conditions before you can officially be approved. Often, a conditional approval means you’ll need to provide more information to the underwriter, such as a verification of homeowners insurance or private mortgage insurance. Once you meet the additional requirements, you can schedule closing.

How long does underwriting take FAQ 

Can underwriting be completed in a week?

Yes, underwriting can be completed in a week. However, the underwriting timeline you can expect will vary based on factors like the underwriter’s schedule, the complexity of your finances, and the type of loan you’re applying for. 

Why is my underwriting taking so long?

Your underwriting might be taking longer than usual for many reasons, such as if the underwriter is having a hard time verifying the statements you made on your application or they are simply busy. If the underwriter needs additional information or has questions, they will reach out to you directly or via your loan officer.

How long after underwriting is closing?

After underwriting, you can close fairly quickly. Before you do, your title company needs to complete a title search and you’ll need to schedule an official closing date with the seller.