A loan typically goes to underwriting after the borrower has submitted an application and the lender has reviewed the borrower's credit report, income, and other financial information. Underwriting is the process of evaluating a borrower's creditworthiness and determining whether the loan should be approved or denied.
During the underwriting process, the lender will review the borrower's credit history, income, debt-to-income ratio, and other financial information to determine the borrower's ability to repay the loan. The lender will also consider the collateral, if any, that is being offered to secure the loan.
The underwriter will review all of the documentation provided by the borrower, including tax returns, bank statements, and pay stubs, and may request additional information or documentation if needed. The underwriter will also check the borrower's credit report to verify that the information provided is accurate and up-to-date.
Once the underwriter has completed their review and determined that the borrower meets the lender's requirements for creditworthiness, the loan will be approved and the borrower will be notified. If the underwriter determines that the borrower does not meet the lender's requirements, the loan may be denied or the lender may require additional documentation or collateral to secure the loan.
The underwriting process can take several days to several weeks, depending on the complexity of the loan and the volume of applications the lender is processing. However, it is an important step in the loan approval process to ensure that the lender is making sound lending decisions and minimizing risk.
