How long the underwriting takes depends on a lot of factors like procedures for underwriting, the number of applications your lender may already have to review, and your financial situation. If you’re self-employed or a freelancer, for instance, it may take longer. The underwriting process also determines how much of a risk it may be for the lender to grant you the loan – how likely you are to make on-time payments and repay the loan as per the schedule.
Before purchasing a home, you need to apply for a mortgage and your loan will go through something called underwriting which is when the lender verifies all your financial details to decide if your loan can be approved. The person who verifies your information is called an underwriter.
During underwriting, your lender will look at your assets, investments, income, and debt to decide which type of loan is best suited for your financial profile. Your property is appraised to match the loan you have applied for. The underwriter goes through your bank statements thoroughly to understand some of the transactions such as a large withdrawal or deposit into your account. The application and preapproval can take less than a week to finish. After you choose a home and make an offer, it will be appraised and valued. This will also take a week, or less than that. Verification of your documents by the underwriter may take just a few days or even weeks to complete because they go through every detail of your financial information thoroughly to decide how risky it is to offer you the loan.
After this, the lender may fully approve your loan or provide conditional approval (meaning you need to meet some conditions for approval by giving some additional details). You’ll receive the final underwriting before three days of closing if everything looks good.
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