How long does underwriting take?

Underwriting — the process by which a lender determines if you qualify for a loan — can feel like a waiting game. However, knowing what to expect can help you stay calm and confident.

Mortgage underwriting can take anywhere from a few days to a few weeks, but most often takes 45 – 60 days from application to closing.

In this article, we’ll dive deeper into the underwriting process and how you can speed it up.

What is mortgage underwriting?

Mortgage underwriting is how a lender confirms that you qualify for a loan. It typically involves them carefully combing through your financial information and the value of the property to ensure that lending to you is worth the risk.

Automated vs. manual underwriting

Most mortgage lenders use a computer algorithm to underwrite loans. This is called automated underwriting. However, they may also underwrite your loan by hand, aka manual underwriting. This may be necessary if you have limited or no credit history or a complicated financial profile.

That said, manual underwriting doesn’t mean anything is wrong with your application. It just means someone needs to take extra care to understand your situation.

How long does underwriting take, on average?

On average, underwriting takes 45 – 60 days, but every home buyer’s situation is different. In some cases, the process can take as little as a few days.

Remember, the purpose of underwriting is to assess your ability to take on a loan. The simpler your finances, the faster the process.

What determines how long mortgage underwriting takes?

The length of the underwriting process is determined by many factors, including:

• The complexity of your financial situation
• Factors related to the property
• The loan you’re applying for
• The quality of the documents you provide
• Mid-process changes to your credit or finances
• The lender’s operations and loan volume

For example, if you’re self-employed and have irregular income, this could prolong underwriting. The same goes if a home appraisal comes back lower than expected.

Plus, every lender’s process is a little different, so asking your lender about their workflow and communications up front can help you set realistic expectations.

The underwriting process: A timeline breakdown

Here’s a breakdown of the underwriting timeline:

1. Loan application and preapproval: A few days

When you first apply for a mortgage, you’ll provide information about your financial situation. This may include information regarding your:

• Credit score
• Debt-to-income ratio (DTI)
• Income and employment history
• Assets and liabilities

Get your mortgage preapproval letter

At this point, you may get a preapproval letter from the lender stating how much they’re willing to lend to you based on your financial situation. This can help you set a home buying budget and make your offers more competitive by showing sellers you’re serious about buying.

A Rocket Mortgage Verified Approval¹ takes preapproval a step further. It includes a manual review by a human underwriter, assuring you and sellers that you’re ready to buy a home.

Find a home and make an offer

Once you’ve found a house you want to buy, you can make an offer. In most cases, you’ll need to negotiate buying terms with the seller before signing a purchase agreement.

2. Appraisal and valuation: A week or less

Most lenders require a home appraisal for home purchases and refinances. This helps them determine the fair market value of the property, which serves as collateral on the loan. If the appraisal comes in low, the loan may no longer meet the lender’s maximum loan-to-value (LTV) requirement, and you may need to make up the difference with cash or drop the deal.

3. Collecting documentation and underwriting: A few days to a few weeks

Once the details of your loan and application have been prepared, an underwriter will look over every aspect of the file to verify that you qualify for the loan and that they aren’t taking on too much risk by lending to you.

Some of the documents the underwriter may review include:

• Tax returns
• W-2s
• Bank statements
• Retirement savings
• Pay stubs
• Investment account statements

Among other things, underwriters will evaluate your ability to repay the loan, your history of repaying debt, and whether the property’s value justifies the loan amount.

4. Conditional approval and additional documentation: A week or so

If everything looks good with your application, the lender may approve the loan or offer a conditional approval, which may require you to provide additional documents. Then, as long as you meet all the lender’s conditions, you’ll be cleared to close on the loan.

5. Final underwriting and clear to close: At least 3 days

Once the underwriter has determined that your loan is fit for approval, you will be cleared to close and receive a Closing Disclosure, a five-page form that provides final details about your mortgage, including the:

• Loan amount
• Interest rate
• Estimated monthly payment
• Closing costs
• Cash to close

How to speed up the underwriting process

To speed up the underwriting process, follow these best practices:

Provide accurate information up front

Ensure everything you provide your lender is accurate, up to date, and exactly what’s requested. Delays often occur when you don’t submit the right paperwork or you don’t submit it in a timely manner.

Be honest about your finances

Be honest with your lender about your finances, including your credit, income, and debts. After all, this information will come out during the underwriting process anyway. Being dishonest only prolongs the process. Plus, even if aspects of your personal finances are less than ideal, they won’t necessarily hold you back from getting a loan.

Keep in mind that you may need to provide a formal letter of explanation if you have unusual financial activity or there are other extenuating circumstances.

Don’t apply for new credit

Avoid applying for new credit during the underwriting process, as it can delay your loan approval and even cause your application to be denied.

Stay in touch with your lender

To keep the underwriting process moving along, stay in close contact with your lender. They may request additional documentation at any time, so it’s important to respond promptly.

What to do if your loan application is denied during underwriting

Even when you’ve done everything right, there may be times when your loan application is still denied. For example, this could happen if the appraisal comes in low or your financial situation changes unexpectedly. Don’t lose hope. This doesn’t have to be the end of your homeownership journey, and you can still regroup and try again.

If your loan application is denied, here are some steps you can take:

• Review your credit report: Check that the information is accurate and report any mistakes. This could improve your credit score.
• Improve your financial situation: Explore ways to lower your DTI, such as paying off debt or raising your income by asking for a raise at work or starting a side hustle.
• Seek alternative financing options: Consider other ways to finance your home purchase, such as a home equity loan or getting a co-signer.  

The bottom line: Be prepared for the mortgage underwriting timeline

Mortgage underwriting typically takes 45 – 60 days from start to finish, though the timeline varies based on your financial situation, the property, and your lender’s process. By providing accurate documentation up front, avoiding new credit applications, and maintaining open and honest communication with your lender, you can help move the process along smoothly.

Ultimately, understanding what to expect during underwriting empowers you to navigate the home buying journey with confidence. Ready to take the next step? Apply for a mortgage online today and start your search for your dream home.

¹Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, assets and debt. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Rocket Mortgage’s control, including, but not limited to satisfactory insurance, appraisal and title report/search, or if you no longer want to proceed with the loan, your participation in the program will be discontinued. If your eligibility in the program does not change and your mortgage loan does not close due to a Rocket Mortgage error, you will receive the $1,000. This offer does not apply to new purchase loans submitted to Rocket Mortgage through a mortgage broker. Rocket Mortgage reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Rocket Mortgage. Additional conditions or exclusions may apply.

Rocket Mortgage is a trademark of Rocket Mortgage, LLC or its affiliates.