How Long Does Mortgage Underwriting Take?

Timeline for Mortgage Underwriting

From start to finish, it takes an average of 45 to 60 days to close on a mortgage—and underwriting is an important part of that process. According to NAR, underwriting can be as quick as a few days if there are no hold-ups. But in most cases, lenders end up requesting additional information that drags out the process for at least a week (maybe longer). Here's a closer look at each stage of mortgage underwriting.

1. Get Preapproved

Preapproval is often the first step to getting a mortgage. Before issuing a preapproval letter that states how much you'll likely be able to borrow, the lender will review your key financial information, including the following:

• Creditworthiness
• Income
• Assets
• Debts
• Expenses

Your preapproval letter should also include the interest rate and loan type the lender is prepared to offer if your mortgage application is approved. It's wise to shop around and compare offers from multiple lenders. You can include a copy of your preapproval letter with any offers you make to home sellers.

Learn more >> How to Get Preapproved for a Mortgage

2. Submit Your Application

If your offer is accepted, the next step is completing a mortgage application. This process is similar to getting preapproved and confirms your financial readiness to buy a home. Be prepared to submit the following documents:

• A copy of your driver's license and Social Security card
• Immigration paperwork, if applicable
• Rental history and contact information for previous landlords
• Recent pay stubs
• W-2 forms from the past two years
• Bank statements for all checking, savings and investment accounts
• Financial documents related to rental properties, if applicable
• A gift letter if any portion of your down payment was gifted to you
• Balances, account numbers and monthly payments for all debt, which includes credit cards, student loans, personal loans and auto loans

The mortgage lender will move forward with underwriting during this time, and they may request additional documents while reviewing your application. For example, if you own another property with an outstanding mortgage, you'll need to provide the lender name, account number, loan type and monthly payment amount. Your underwriting timeline could also be affected by:

• Complexity of your financial situation
• Lender efficiency
• Market volume

3. Prepare for Closing

Once underwriting has cleared and your application is approved, you'll be ready to close on your mortgage. You'll pay closing costs at this time, which typically range from 2% to 5% of the purchase price. These costs usually include:

• Lender fees: This can include origination fees and discount fees to reduce your interest rate.
• Payments to third-party service providers: You may be responsible for a home inspection fee, appraisal fee, title search services, title insurance premiums and real estate attorney fees.
• Prepaid funds: You'll likely need to prepay a portion of your property taxes, homeowners insurance and mortgage insurance, if applicable. The lender will hold the funds in an escrow account and pay these bills on your behalf when they're due.

Factors That Can Delay Mortgage Underwriting

Incomplete Documentation

If there are missing or incomplete documents in your mortgage application, it could cause delays in underwriting. The lender will likely come back to you to request additional documentation. The quicker you provide it, the faster your application will be processed.

Credit Issues

You can expect the lender to take a deep dive into your credit. If anything has changed since you got preapproved, those things could come back to bite you. That may include:

• Missed or late payments
• New debt
• New credit accounts

The minimum credit score for a mortgage will depend on the loan type and lender. Conventional loans typically require a score of 620 to 660, though you could get approved for a government-backed mortgage with a lower score.

Learn more >> How to Get Your Credit Ready for a Mortgage

Changes in Your Income or Expenses

The underwriting process could be delayed if you've experienced a drop in income or have taken on new expenses since getting preapproved. Remember that the lender wants to feel confident in your ability to pay your mortgage. To that end, they may request additional documentation to substantiate your income. Serious issues here could prevent you from getting approved.

Appraisal Issues

If your home appraisal comes in low, meaning that its market value is less than the loan amount, the lender won't approve the full amount. They do this to protect themselves from risk—if you default on your mortgage, the lender may not be able to recoup its losses. With a low appraisal, you may have to make a larger down payment to cover the difference, or negotiate a lower purchase price.

Learn more >> What Happens if a Home Appraisal Comes In Low?

How to Speed Up the Mortgage Underwriting Process

• Check your lender's online reviews to get a feel for customer satisfaction and efficiency.
• Have all required application documents ready.
• If the lender requests additional documentation, provide it swiftly.
• Maintain healthy credit by avoiding new debt and making on-time payments during the underwriting period.
• Keep the lines of communication open to resolve issues quickly.

The Bottom Line

Mortgage underwriting can take anywhere from a few days to several weeks. The process could be delayed if you have a complex financial situation or provide incomplete documentation. Maintaining strong credit during the underwriting period is important—a low score could make it hard to qualify for a mortgage or secure a competitive interest rate. You can check your FICO^® Score^☉ and credit report for free with Experian.