How Long Does Mortgage Underwriting Take?

When you apply for a mortgage, your application has to go through a manual or automated underwriting process before you can close. At Zillow Home Loans, we use an automated underwriting system like most lenders. On average, mortgage underwriting takes between 30 to 45 days to complete. During the process, the underwriter will analyze your application and determine whether you qualify for a mortgage based on financial factors like income, debt and credit.

Below, we give you a timeline view of the mortgage process so you know exactly how long underwriting will take. Buying a home is stressful enough. Learn how you can speed up the mortgage underwriting process and close on your dream home sooner.

What is mortgage underwriting?

Mortgage underwriting is the process lenders use to evaluate a potential borrower’s financial risk and creditworthiness. After you complete your mortgage application, the loan officer or underwriter handling it will closely examine your financial background to determine your home loan eligibility. There are several steps to getting a mortgage but most of what happens in the background involves verifying the information you submitted in your application, like current income, debts, employment and credit, are free of inconsistencies. This review process is all part of underwriting.

How long does underwriting take?

The mortgage underwriting process can take up to 60 days. The standard turnaround time to take a mortgage purchase loan from contract to funding usually takes 30 to 45 days, but most lenders will work to have the mortgage underwritten within 30 days to meet the agreed upon closing date set in the purchase contract. A refinance loan is the only type of mortgage that can be underwritten in less than 21 days.

The reason underwriting can take this long is because your loan officer will need to verify your income, assets and debts. The home will also need to be appraised by a qualified appraiser, and you may choose to have the home inspected — both of which require an appointment with a professional in the field.

Mortgage underwriting timeline: how long does the underwriting process take?

Mortgage underwriting can be broken down into five steps that happen during the mortgage application process. Any gaps in information can prolong the process and your loan approval. Here are each of the five steps you’ll go through during the underwriting process and a look at how long each step will take:

Initial assessment: 1 to 3 days

Once you submit your loan application, the loan officer or an underwriter will conduct an assessment to ensure you meet the basic eligibility criteria for the loan. The eligibility assessment typically includes:

• A review of your credit report, which includes your credit score, payment history, credit utilization, and more
• Confirm your work history and current income 
• A review of your assets, including any investments, retirement accounts, pension accounts, bank statements, and other cash reserves

• A look at your debt-to-income ratio (DTI)
• The home purchase price

If the initial assessment goes well, the loan officer or underwriter will likely grant you mortgage pre-approval. This may be verified or non-verified depending on whether every required piece of information has been verified. This means you’ll receive a pre-approval letter within a few business days and can proceed with making a confident offer. 

If you receive conditional approval from the lender, it means the underwriter is willing to approve your loan if you meet specific requirements. These requirements may include providing missing documentation or proof of income or paying off certain debts before buying a home. 

Documentation collection: 7 to 14 days

This step happens once the borrower has a contract. If the mortgage underwriter flags something during the initial review or if information is missing, they may grant you conditional approval. Conditional approval means the lender will likely finalize your mortgage application if nothing materially changes to your financial situation, but additional information is needed to complete your risk assessment.

The type of documents the underwriter may request typically include:

• Additional pay stubs or tax returns
• Current bank statements or investment statements
• Letters of explanation for certain credit marks
• Gift letters if you're using gift money for your down payment
• Proof of auxiliary income, such as rental income, alimony, etc.
• Divorce decrees or child support orders

These documents are used to check for any inconsistencies, such as:

• Large, unexplained deposits
• Occupational gaps or frequent job changes
• Marks on your credit report within the last two years
• Undisclosed debts or other financial obligations
• Significant monthly financial obligations, like child support or alimony

It’s important to note that conditional approval does not guarantee final approval for the mortgage loan. It simply means that you’ve met the lender’s criteria thus far. They may need more information to come to a comprehensive conclusion regarding your loan approval.

Appraisal and title search: 1 to 7 days

The next step of mortgage underwriting involves the property's appraisal to determine its fair market value. Among other data points, appraisers typically determine a property’s value by its size, location, features and condition, which are compared to recent home sales in the same or similar nearby neighborhoods. The appraisal also gives the underwriter details on the condition of the home which helps determine if the home qualifies for the loan. For example, if a home is not in good enough condition or has specific issues, those may need to be remedied for loan approval. 

Since the lender’s primary goal is to minimize lending risk, the appraisal process allows them to ensure that the loan amount a borrower requests doesn’t exceed the home’s value. 

Conducting a title search also guarantees that there are no outstanding ownership claims, taxes, HOA fees, liens or judgments that could prevent the direct transfer of the home’s title to you. The lender will also likely require title insurance (to cover ownership disputes that are discovered post closing), and homeowners insurance (to protect against damage to the property itself  as well as personal property within your home), to further mitigate their lending risk.

Final review: 1 to 3 days

Once the mortgage underwriter finishes collecting and reviewing all your documents and the appraisal and title search are complete, they’ll conduct a final evaluation. During the final evaluation, the underwriter confirms that conditions set after the initial review have been met and all conditions for the loan program have been satisfied. In addition, they’ll check for any new debt and applications for credit, such as applying for a new car loan or credit card since your last credit report was pulled.

If the underwriter finds inconsistencies, you’ll get the opportunity to provide additional information or give a written explanation. If the underwriter finds any discrepancies with your additional information or explanation, they’ll likely suspend your application until you can provide the necessary information. This typically happens when they have difficulty verifying your income or employment.  

Approval or denial: 1 to 3 days

The last step of the underwriting process is deciding whether your loan application will be approved or denied. If the underwriter determines that your overall risk profile is acceptable, you’ll receive a letter of commitment detailing the terms and conditions of the loan. 

You’ll also receive a closing disclosure within three business days of closing on your mortgage loan. This disclosure signifies that you can officially move forward with your home purchase, however, you’ll want to read it carefully before signing to verify the final details of your loan.

If the underwriter determines that your overall risk is too high, you’ll receive a letter of adverse action explaining the specific reason (or reasons) for the denial. 

These reasons may include:

• Credit issues, like low scores or marks
• Insufficient income or high debt ratios
• Property issues, such as low valuation or poor conditions
• Missing documents
• Discrepancies, such as large sums of money with no source or explanation given

Speeding up the mortgage underwriting process

Here are some things you can do to minimize any hiccups during the underwriting process, so you can close on-time or faster. 

Provide accurate information

To make the mortgage underwriting process go smoothly, provide your lender with every piece of information they ask for and make sure it’s current. This means providing your most recent bank statements, pay stubs and employment information. Refrain from providing extra documentation that your lender didn’t specifically ask for. This will only prolong the process as any out-of-date or conflicting information may cause confusion. 

Be honest

Before applying for your mortgage loan, having an honest conversation with your lender regarding your financial situation is a good idea. Let them know about any recent financial issues or marks on your credit report. This will help them determine if they’ll need additional documentation from you and prevent delays from them needing to ask halfway through the evaluation.

Respond in a timely manner

If your loan officer or loan processor requests additional documentation during the underwriting process, make sure you send it in complete form, and as soon as possible. The longer you wait to provide essential information, the longer underwriting will take.

Be financially responsible

There are a few things underwriters want you to refrain from during the few weeks of the underwriting process:

• Applying for new credit
• Taking on new debt
• Making large purchases
• Leaving your job

If your credit score, debt-to-income ratio, bank statements or employment information changes significantly, it will interrupt the process and further delay it. The underwriter will likely have to request more information to finalize your application, or it may cause the lender to deny your mortgage application altogether.

Mortgage underwriting is an essential part of home buying. The best way to speed up the process is to have all the documents ready for the underwriter, be honest when it comes to questions about your finances and respond to any questions as soon as you’re able.