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How long does underwriting take?

6 steps to closing on your new home

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By: Jennifer Schurman
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Edited by: Tammy Burns

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You are so close to getting the keys to your new home, but one crucial part of the mortgage process determines how quickly you can move in and if you will close on time: the underwriting.

Underwriting begins with your mortgage application and wraps up right before you're ready to close the deal on your new home. Any hiccup — such as a minor mistake on a document or even a loan officer out of office for the day — can delay your closing. The length of the underwriting process can take anywhere from several days to a couple of months.

Key insights

  • Several factors can impact how long underwriting takes, including the complexity of your financial situation and the workload of the underwriting team.
  • Keeping in touch with your lender and returning requested documents and information quickly can help speed up the underwriting process.
  • It is important not to open new lines of credit during your mortgage process because this will slow down underwriting.

What is mortgage underwriting?

Mortgage underwriting is an in-depth examination of a loan applicant’s financial information and credit history and details about the property to determine the applicant’s qualification for a mortgage loan. The underwriter is responsible for analyzing the borrower’s credit, capacity to repay the loan and collateral to ensure the lender is making a financially sound loan decision.

For conforming loans, underwriters must follow lending guidelines set by Fannie Mae and Freddie Mac.

For loans to be conforming, the underwriter must follow lending guidelines set by Fannie Mae and Freddie Mac, government-backed enterprises that purchase mortgages from lenders and sell these loan packages as mortgage-backed securities (MBS) to investors.

What happens during the underwriting process?

An important part of underwriting is verifying the borrower's information on the application. Because the applicant could falsify this information (although this is illegal), the underwriter must investigate and verify every detail to ensure its accuracy.

They need to ensure the borrower’s income matches the amount they stated, for instance, with a pay stub or a W-2. Annual income is a big factor in helping the lender determine how much a borrower can comfortably afford to repay.

» MORE: What does clear to close mean?

How long does an underwriter take to approve a loan?

Many of the reviewers on our site reported brief underwriting processes — from a few days to two weeks in many cases. However, several factors can slow the process down. A reviewer from Arizona, for instance, said underwriting took “forever” because the appraisal team underappraised the home “by at least $20,000.”

According to ICE Mortgage Technology, the average time for all purchases and refinances to close as of March 2021 was 52 days. Its data showed that VA and FHA loans took slightly longer to close than conventional loans.

Real estate expert Dottie Herman, vice chair of Douglas Elliman Real Estate, said, "The underwriting process generally takes anywhere from three to six weeks.”

What happens if underwriting takes too long?

Once you start the mortgage process, you should get an estimate of how long it will take to complete your loan. It is a good idea to expect the process to take longer than the estimated time and to have backup living plans if there is a waiting period.

For example, if your rental agreement ends at the end of the month, ideally you will want the keys to your new home at the same time — but if underwriting pushes your closing date back a week, having the ability to live with a family member or borrow an RV can help.

» MORE: First-time homebuyer benefits

The underwriting process

The underwriting process starts when you apply for a mortgage with a lender and ends when you receive the Closing Disclosure, a required form that outlines the terms of your loan. The process may vary slightly from lender to lender, but it tends to follow the general steps listed below.

Applying with a lender
First, you’ll submit a mortgage application to your lender. You can do this online (which may be quickest) or in person at your lender’s office. You’ll provide personal information like your name, address and Social Security number. You’ll also need to provide detailed financial information, such as your income and bank account balances.

Take your time when completing the application — you want to make sure the information you provide is correct. Your signature acknowledges that the information is both true and accurate to the best of your knowledge.

Verification of personal information and preapproval
Once you submit the application, your lender will require you to upload documents like W-2s, tax returns, bank account statements, etc. This lets the underwriter verify your income and other assets. When the underwriter has completed a review of your finances, you should receive a preapproval decision within one to two weeks.

Preapproval gives you an idea of how much home you can afford and lets you lock in an interest rate before you’ve found the perfect home. If you’re preapproved, you’ll receive a letter with information about your loan maximum, which you can use to make offers on homes. (Preapproval letters do have an expiration date, which is typically 60 to 90 days, depending on the lender.)

Appraisal
At this point, the underwriting process essentially pauses until you’ve found a home to buy and the seller accepts your offer. Then the underwriter evaluates the collateral on the loan (the home itself). They need to ensure the home is at least worth what you’re borrowing.

The underwriter will order a home appraisal conducted by a certified appraiser who inspects the home’s condition and compares it with similar homes in the area. The home appraiser will then report an assessed value to the underwriter, usually within a few days of the appraisal. In some cases, you may be granted an appraisal waiver if the home’s value can be determined through other methods.

Title search
The underwriter will also require a title search , which is a thorough review of public documents. The title search ensures that the home’s title can be successfully transferred from the seller to the buyer at closing. Depending on your state's requirements, you can hire a title company or a real estate attorney to complete the title search. This step in the underwriting process could take 10 to 14 days to complete.

Some steps can happen simultaneously, like the title search and the appraisal. This helps speed up the process.

Underwriting decision
The underwriter will reach a final decision once the title search and appraisal are complete. They may also require additional information from you at this time. For example, if the underwriter notices a recent large purchase, you may need to write a letter explaining the purchase or withdrawal.

In general, it’s best to refrain from making big purchases during the underwriting process because it could interfere with the approval decision. You’ll also need to refrain from opening new credit during the closing process. Underwriters will pull your credit report again just prior to closing to ensure there are no major changes.

If the underwriter is satisfied with the title search and appraisal results, you should receive a verified approval decision within a week or two. Some decisions may arrive sooner (within a few days), depending on how many applications the underwriter is currently handling.

Once you receive verified approval, you’ll also get the Closing Disclosure to review before closing. This five-page document finalizes your mortgage loan terms; lenders are required to provide it at least three business days before the closing date. This gives you time to review the loan details before signing the agreement at closing.

Closing
The closing occurs on a specific date, usually 30 to 60 days after acceptance of the purchase offer. You’ll sign the Closing Disclosure and other legal documents, like the note. It’s important to note the cash-to-close amount detailed on the Closing Disclosure — these are the funds you’ll need to bring to closing (either by wire transfer or by cashier’s check).

How to speed up the underwriting process

While many factors are out of your control, such as the underwriter’s workload, there are some ways to be proactive.

“The best way to speed up the process is to make certain that all of your paperwork is completed and accurate," said Herman. “I would also try to anticipate what the lender might ask for during the process so that those additional documents can be found and submitted quickly. Don't be afraid to take control and stay on top of things for the duration of the underwriting process in order to meet tight deadlines.”

To prevent delays, avoid any major changes to your credit once you start the underwriting process.

Additionally, maintaining good or excellent credit can help. Many lenders use automated underwriting to speed up the initial approval decisions. Automated underwriting instantly approves borrowers that meet or exceed the lender’s specified credit profile.

You’ll also want to avoid opening new credit accounts during the underwriting process and before closing (this includes financing new furniture for your home). Your underwriter will pull your credit report again just before closing to ensure there are no major changes. Any new changes could delay or compromise your final approval.

» MORE: 9 mortgage questions to ask your lender

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Bottom line

Underwriting is a critical part of the mortgage process, determining whether you are qualified to take out a loan to purchase a particular home. Underwriting begins when you submit a mortgage application and ends just before you close on your home.

The entire process usually takes from 30 to 60 days, and it includes steps like the appraisal and title search. You can help speed up the process by having excellent credit and promptly responding to the underwriter’s requests for information. You can avoid delaying your final underwriting approval by providing accurate information on your application and not opening any new credit accounts before you close on your home.

Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. ICE Mortgage Technology, " March 2021 Origination Insight Report ." Accessed May 14, 2023.
  2. Consumer Financial Protection Bureau, “ Data Point: 2021 Mortgage Market Activity and Trends .” Accessed May 14, 2023.
  3. Federal Housing Finance Agency, “ Fannie Mae and Freddie Mac .” Accessed August 22, 2023.
  4. Consumer Financial Protection Bureau, “ Get a prequalification or preapproval letter .” Accessed August 22, 2023.
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