Loan Mortgage Underwriting Process Meaning & Tips - Kotak Bank
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20 APRIL, 2022

While dreaming of a perfect house is easy, finally being able to own one is a long process. You might spend days or even months finding the perfect house that checks all the boxes. But the real challenge begins when you have to finance the house. You could have to accumulate your savings, or you can avail a loan. The underwriting mortgage process is usually one of the primary steps to getting approval for a loan. It will not be wrong to say that the underwriting process decides if you will get the loan.


Do you know what this underwriting process is? If not, read on.


What Is the Underwriting Mortgage Process?

The mortgage underwriting process is one of the most important steps in the home-buying process. It can also be one of the most stressful. The underwriter evaluates your application, your financial health and credit history and determines whether you will be able to pay back the loan. Your loan is essentially approved or denied through this process; hence, it is important to understand everything about underwriting.


What the Mortgage Underwriter Evaluates

When a lender evaluates your application, they will look at your income, assets and debt-to-income ratio (how much you owe compared to what you earn). If all of those things are in order, you are likely going to have a smooth experience with the underwriting process.


How Does a Mortgage Underwriter Take Their Decision?

Mortgage underwriters look at many different factors to determine if an applicant is a good risk for their lender. The most important things looked at during the underwriting process include:


  • Your income and employment history
  • Your credit scores and history of credit
  • Your assets, including your down payment and closing costs
  • Your debts, including current debt payments and how much you plan to borrow for your mortgage
  • The type of loan you want to get, your loan-to-value ratio (LTV) and your debt-to-income ratio (DTI)


Tips for a Smooth Mortgage Underwriting Process

The better prepared you are for underwriting, the quicker the process will go. Following are the steps that can help in a smooth underwriting process:


  • Fill out all paperwork completely and accurately. It would be best to keep all your documents organised and procured from different sources (if required) before applying.
  • Request a copy of your credit report and check for errors; be sure to resolve any mistakes before you apply for a loan so that your credit score is not unnecessarily affected.
  • Have a lower LTV by paying a higher down payment. This reduces the risk for the lender and helps you get approval for a mortgage faster.



While the underwriting mortgage process is primarily used for home loans, many lenders opt for it while lending a loan against property too. You must ensure to furnish loan against property documents to get approval. The mortgage underwriter can reject your application for factors like new or undisclosed debts, unstable jobs, or issues with the home, which can affect its sale value. However, once your loan is approved, your home purchase is almost complete, and you can get the loan amount from the lender and sign the final paperwork. 

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.