An underwriter is an individual working for mortgage lenders who determines whether or not a borrower’s loan is approved. If a borrower gets a loan from a mortgage broker, the broker will send the loan documents to the lender’s underwriter. The underwriter evaluates the entire loan application including the appraisal of the home, and then decides whether to approve or decline the loan application.
Underwriters often request additional information while evaluating the loan application. For example, underwriters often ask for additional pay stubs and documentation of the origins of funds used for the down payment. Underwriting guidelines are now more strict as a result of the credit crisis and will vary by lending institution. Some lenders use underwriters who work within their firms, but they will also outsource to underwriters working for other banks or mortgage lending institutions outside of the state. Sometimes, loans can take longer to get approved when a lender works with an out-of-state underwriter with less local knowledge.