By the Wirly Editorial Team | AI-assisted, human-reviewed
Underwriting is the process a lender uses to evaluate your financial profile and the property to determine whether to approve your mortgage application and at what terms.
When you apply for a mortgage or refinance, an underwriter reviews your complete financial picture. They verify your income, employment, assets, debts, and credit history. They also review the property appraisal to confirm the home's value supports the loan amount. The goal is to assess the risk of lending to you.
Underwriters follow guidelines set by the loan type. Conventional loans follow Fannie Mae or Freddie Mac standards, while FHA and VA loans have their own requirements. Common reasons for underwriting delays or denials include unexplained large deposits, recent job changes, high debt-to-income ratios, or appraisal issues.
The underwriting process typically takes 1 to 3 weeks, though it can be faster with automated underwriting systems. To help the process go smoothly, avoid making large purchases, opening new credit accounts, or changing jobs between your application and closing. Respond promptly to any requests for additional documentation.
Your debt-to-income ratio is the percentage of your gross monthly income that goes toward debt payments. Lenders use DTI to assess whether you can afford a new mortgage or refinance.
Credit ScoreA credit score is a three-digit number (typically 300 to 850) that represents your creditworthiness. Lenders use it to determine your mortgage eligibility and the interest rate you qualify for.
Closing CostsClosing costs are the fees and expenses you pay when finalizing a mortgage, typically ranging from 2% to 5% of the loan amount. They include lender fees, appraisal costs, title insurance, and government recording charges.
See how this affects your refinance
Use real Federal Reserve data to calculate your potential savings.
Try the Refinance Calculator