Purchase Tips · June 7, 2025
What Happens During Mortgage Underwriting?
Underwriting is where your loan application becomes a real decision. Here is exactly what the underwriter reviews and how to keep your closing on track.
Underwriting is where your loan application becomes a formal approval decision. Understanding the process reduces anxiety and prevents delays.
The Three C's of Underwriting
Capacity: Can you afford this loan? Verified income, employment, and DTI. Capital: Do you have enough assets? Bank statements confirming down payment source and reserves. Credit: Will you repay? Full credit report review including payment history and any derogatory marks.
The Three Decisions
Approved: You meet all guidelines as submitted. Conditionally Approved (most common): Approved but additional information needed — letter explaining a credit inquiry, documentation of a large deposit, updated pay stub, HOA certification for a condo. Denied: Does not meet guidelines. Often resolvable by switching programs or addressing the specific issue.
Tips for Smooth Underwriting
Do not open new credit accounts. Do not make large unverified deposits. Do not change jobs. Respond to all document requests same-day when possible. Every day of delay in providing documents adds a day to your closing timeline.
HMS proactively manages every file through underwriting. Call 309-222-8286.