Underwriting

Definition: Mortgage underwriting is the lender's evaluation of a proposed loan's risk and compliance with lending requirements.

Example

An underwriter reviews income, debts, credit history, assets, and the property's value before a loan decision.

Keep the distinction clear

An appraisal addresses collateral value; it does not approve the borrower's loan. A prequalification or Loan Estimate is also not a guarantee of final approval.

Related terms

Borrower · Loan-to-Value Ratio (LTV) · Appraisal

Keep studying

Mortgage Qualification: HER vs. TOR and PITI

References: CFPB: mortgage key terms

Pronunciation (US): UN-der-ry-ting (capitals show stress)

Pronunciation reference: Merriam-Webster