Last Updated on 09/20/2017 by GS Staff
I was a mortgage underwriter for many years. I will tell you how I became an underwriter and how others did it as well. However, keep in mind that there is not just one path to take to become an underwriter. Read what I say below, read what others say, and develop your own plan to get where you want to be.
Education
As you probably expected, most lenders or banks will not hire you as an underwriter without at least a high school diploma. Do you need a college degree? I know several people who became underwriters without a college education. Most colleges do not have a courses in underwriting so college isn’t going to directly prepare you for the job.
If you do go to college, majoring in accounting or finance will likely provide you the most benefit when you become an underwriter. Some colleges offer courses in real estate such as real estate finance or real estate analysis, which may be beneficial to some extent.
When I became an underwriter I was working toward a Master’s in Finance, but my undergraduate degree was unrelated to underwriting. My degree really had nothing to do with me getting an underwriting position as you will see below.
Essentially, college is not necessary to become an underwriter. If you look at job postings, you commonly see only the requirement for a high school diploma for the positions. However, college is obviously looked at favorably by some employers. If you are looking to advance beyond and underwriter in the future, it may be necessary to get a degree. It may also help you get your foot in the door at a bank.
Getting in the Door
Fresh off obtaining my undergraduate degree, I took a job at a bank doing data entry. This obviously wasn’t what I wanted to do for a career, but it paid Okay money while I was figuring out where I could obtain a permanent job.
The mortgage industry was starting to boom at this time and the place where I was working was a large and growing mortgage bank. A few months after I started, the bank opened up an underwriting assistant training program and invited a select number of employees to join. I was one of the employees.
The training program taught the ins and outs of underwriting over the course of a few weeks. We then sat with existing assistant underwriters and learned the ropes hands on. In case you don’t know, an underwriting assistant basically helps support the underwriter by doing things like reviewing conditions and answering loan officer questions about loans being reviewed. I worked as an underwriting assistant for a while before my manager was comfortable with me being on my own as an underwriter.
If you want to become a mortgage underwriter, you may want to consider getting your foot in the door first. Sure, apply directly for mortgage underwriting positions. However, if you are not having any luck securing an underwriter position, you may want to obtain an entry-level position at a mortgage lender. Even if the position is not directly related to underwriting, make it your goal to work your way up to that position. Excel at that entry-level job and eventually make it known to the company your goal for advancement. Most companies love to promote from within, which may give you an upper hand once you are ready to become an underwriter.
Other Paths
Instead of proving a long-winded explanation of various paths to become an underwriter, I will just list a few examples of paths people take. I’ll begin with my path discussed above and then give other example.
- College>>>Mortgage Bank Data Entry>>>Underwriting Assistant>>>Underwriter
- High School Diploma>>>Teller>>>Loan Processor>>>Underwriting Assistant>>>Underwriter
- College or High School Dipolma>>>Underwriting Assistant>>>Underwriter
- College>>>Underwriter (lots of training prior to underwriting on own)
- College>>>Internship While In College at Lender>>>Underwriting Assistant>>>Underwriter
- High School Diploma>>>Loan Officer>>>Underwriter
- High School Diploma>>>Customer Support>>>Underwriting Assistant>>>Underwriter
What You Will Do
As an underwriter you will sit at a computer all day and review loan documentation such as income, assets, credit reports, appraisals, purchase agreements, and more. You will commonly calculate the borrower’s income, determine the borrower’s assets, review credit reports, examine the appraisal to determine if the value is support, and many other tasks. You will ultimately make decisions on whether to approve or deny mortgage loans based on documentation you review. Most lenders use an automated system which allows you to enter in the data from the loan documentation such as your income calcualation. You will receive an automated response such as approved or ineligible based on what you entered.
You will likely be expected to underwrite a certain number of loans per week. When it gets busy, you may be required to work overtime. You also may have to routinely speak with loan officers or other mortgage professionals who submitted the loan documentation to you for review. Your day will be consumed by underwriting and possibly taking a decent number of phone calls depending on where you work.
Final Thoughts
If you want to become a mortgage underwriter, you should start studying and learning about underwriting. It is always good to be prepared before you get into the actual position. You should learn some of the basics like what is a debt-to-income ratio and what is a loan-to-value ratio. Start to become familiar with mortgage terms and how the business works. I would even suggests reading through Fannie Mae’s underwriting guidelines on their website to get an idea of their guidelines for conforming loans.
Underwriting can be a challenging and rewarding career. As you gain experience, it also can pay a nice salary. Check out salary.com or payscale.com to get an idea of what an underwriter earns in your area. Obviously, do not get into underwriting just for money. You will soon realize it wasn’t worth it.
