How Long Does Underwriting Take?

Underwriting is a critical step in the mortgage approval timeline. The average amount of time it takes is around 40 days, but it could be shorter or longer depending on how straightforward your application is and whether any issues arise. 

Underwriting delays happen for a lot of reasons, but there are ways you can help the process run as smoothly as possible.

To prepare for the underwriting process, learn how it works and what you can do to help your underwriter.  

What is mortgage underwriting?

Mortgage underwriting is the process of determining whether a given borrower and property are eligible for a loan. A lender examines your income and financial history to assess whether you’re capable of making monthly mortgage payments before it approves you for a mortgage. 

“It’s pretty much the lender's way of checking if you’re a safe bet for a loan. They dig into your financial history to see if you can handle the mortgage payments,” says Mike Roberts of City Creek Mortgage.

The property must also be sufficient collateral to secure the loan. A lender might not approve you for the full purchase price if the home’s appraised value falls too far below the sale offer or it has major flaws and safety issues.

Underwriting is part of the closing process, during which time an underwriter reviews your application, financial documents, and property information to determine whether to approve the loan. 

How long does the underwriting process typically take?

How long the underwriting process takes varies. It typically takes about 40 days, but it depends on a variety of factors. If there are many loans being processed at the same time as yours, or your financial situation is unique, the process can slow down. 

“Some banks will have same-day underwrites. Others will have you five days in the queue,” says John Aguirre of John Aguirre Home Loans. “All banks strive to keep it as efficient as possible, but ultimately the loan program/product, loan type, and workload of the underwriting department will all play a role in how long it will take.”

What factors can delay underwriting?

There are numerous factors that can slow the underwriting process, but the most common involve documentation errors. Here are the biggest delays to look out for:

• Incomplete paperwork: The biggest factor that can delay underwriting is incomplete paperwork. If the underwriter doesn’t have all of the information they need, this can slow down the time it takes for them to do their job.
• Unusual finances: Another factor that can slow things down is if you have a unique financial situation. If you’re self-employed, for example, it can be hard for lenders to verify your income. If your finances have a lot of ebbs and flows, for example, banks may have trouble determining your level of risk.
• Property issues: If the appraisal comes in lower than the home’s sale price, it can create slowdowns. The underwriter might not be able to approve you for the full amount, meaning you’d have to negotiate with the seller or come up with additional funds to complete the transaction. 

How can you expedite the underwriting process?

You can prevent delays during underwriting by responding to communication right away. 

Reilly James Renwick, chief marketing officer at Pragmatic Mortgage, says: “When the underwriter asks for something, don’t wait. Make sure you respond right away. I’ve seen deals delayed simply because somebody sat on an email for 24 hours.”

He adds: “And keep your bank account looking clean. Don’t move money around unnecessarily or make big purchases because it raises red flags. Think of underwriting as a high-stakes Jenga game. Meaning: Don’t make it any harder than it needs to be.”