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What Does a Mortgage Underwriter Actually Look For?

Look For?

If you’re buying a home in Charlotte, you’ll probably hear the word “underwriting” at some point during the mortgage process.

For a lot of homebuyers, it can feel like a mysterious step happening behind the scenes. But after spending about 15 years in underwriting myself, I can tell you there’s a lot less mystery to it once you understand what an underwriter is actually reviewing.

Income and Employment

One of the first things an underwriter will review is your ability to repay the loan.

For a traditional W-2 employee, that may mean reviewing pay stubs, W-2s, and employment history. If you’re self-employed, receive commissions, earn bonuses, or have multiple sources of income, additional documentation may be needed.

This is one reason I recommend talking with a lender early. We can identify how your income may be evaluated before you’re under contract.

Credit and Monthly Debts

Your credit history is another part of the picture, but underwriting isn’t necessarily about having “perfect” credit.

An underwriter may review your credit history, existing debts, and required monthly payments to determine how they fit with the new mortgage payment.

Your debt-to-income ratio, commonly called DTI, helps show how much of your monthly income is already committed to debt.

Assets and Funds to Close

Where is your down payment coming from? What about your closing costs?

An underwriter may review bank statements and other financial documents to verify that you have the funds needed for the transaction.

If some of those funds are coming from a gift, sale of an asset, or another source, additional documentation may be required.

The Property Matters, Too

Underwriting isn’t only about the borrower. The home itself also has to meet applicable requirements for the loan program.

That can involve reviewing the appraisal, property type, occupancy, and other details.

Whether you’re buying a condo in Charlotte, a home in Matthews, or moving farther outside the city, the property can sometimes affect your financing options.

Preparation Can Make a Difference

My underwriting background has taught me to look ahead for questions that could come up later in the mortgage process.

If you’re planning to buy a home in Charlotte or the surrounding area, reach out. I’m happy to review your situation, answer your mortgage questions, and help you understand what to expect before you get to underwriting.