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What Happens During the Underwriting Process? Unveiling the Mortgage Approval Journey

What Happens During the Underwriting Process? Unveiling the Mortgage Approval Journey

The process of buying a home involves several key stages, and one of the most critical steps is underwriting. During underwriting, a lender thoroughly assesses your financial situation and the property you intend to purchase to determine whether you qualify for a mortgage. In this blog post, we’ll explore what happens during the underwriting process and why it’s a pivotal part of your homebuying journey.

1. Submission of Your Mortgage Application:

The underwriting process begins with the submission of your mortgage application. This application contains detailed information about your financial situation, employment history, assets, liabilities, and the property you’re looking to buy. You’ll also need to provide various supporting documents, such as pay stubs, bank statements, tax returns, and information about your credit history.

2. Preliminary Review:

Once your mortgage application is submitted, a mortgage processor conducts a preliminary review to ensure all necessary documents are included. This review helps in identifying any missing information or discrepancies that need to be addressed before underwriting can commence.

3. Verification of Information:

The underwriter is responsible for verifying the information provided in your application and supporting documents. This process includes:

  • Employment Verification: The underwriter will contact your employer to confirm your job status and income.

  • Credit Check: A credit report is pulled to assess your credit history and score.

  • Asset Verification: Your bank statements and other asset documentation are examined to confirm your available funds.

  • Property Appraisal: An appraisal of the property is conducted to determine its value and assess its condition.

4. Income and Debt Analysis:

The underwriter carefully evaluates your income, debt, and credit history to determine your ability to make mortgage payments. They calculate your debt-to-income ratio (DTI) by dividing your monthly debt payments by your gross monthly income. Lenders typically have maximum DTI ratios they are willing to accept.

5. Property Assessment:

The underwriter reviews the appraisal report to ensure that the property’s value aligns with the loan amount you are seeking. If the property doesn’t appraise for the desired amount, it may affect the terms of your loan.

6. Conditions and Documentation:

During underwriting, the underwriter may identify conditions that need to be met before the loan can be approved. These conditions could include providing additional documents, explanations, or clarifications about specific aspects of your application. It’s essential to promptly address these conditions to keep the process moving forward.

7. Final Approval and Clear to Close:

Once the underwriter is satisfied that all conditions have been met and the loan meets the lender’s criteria, they issue a final approval. This approval is often referred to as being “clear to close.” It signifies that your loan is approved, and you can proceed with the closing process.

8. Closing:

The final step is the closing, where you’ll sign all the necessary documents, pay any remaining fees, and officially become the owner of the property. The closing is typically conducted at a title company or attorney’s office.


The underwriting process is a pivotal stage in securing a mortgage for your new home. It involves a thorough review of your financial information, property details, and compliance with lender requirements. By providing accurate and complete documentation and promptly addressing any conditions, you can help ensure a smooth underwriting process and move one step closer to homeownership.

For guidance and support throughout the underwriting process and the entirety of your homebuying journey, trust AZ Mortgage. Our experienced team is dedicated to helping you achieve your homeownership goals.

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