How Long Does Mortgage Underwriting Take?

A:

It all depends on the lender. It can be as little as a couple days to several months. If you think about all the potential factors that come into play when trying to determine a general underwriting turn time, your head might spin. Essentially, there is too much to consider to broadly state how long mortgage underwriting will take. Below are examples of some reasons why underwriting may take so long.

Conditions

When a mortgage underwriter reviews a loan, they might not initially have enough documentation to make a final underwriting decision. The underwriter will condition for the additional documentation needed to determine the eligibility of the loan. The underwriting process is often delayed, sometimes significantly, from having to wait for these conditions to be produced from the borrower or loan officer. If the underwriting department is very busy, it may take some time for the underwriter to review the conditions once received.

Interest Rates

Interest rates can have a big impact on the speed of underwriting. Assume miraculously that mortgage rates drop to .5 percent. What do you think will happen to the volume of refinances or even purchases that the lender receives for review? Yes, underwriting will be swapped with an enormous quantity of loans from people looking to capitalize on this very low interest rate.

Employment Verification

A common procedure in underwriting is to verify the employment of the borrower. This is often required before a clear to close is issued. The underwriter contacts the employer to verify the borrower’s position, start date, and current employment status. If the borrower’s employer does not provide the information in a timely manner, this can cause underwriting delays.

Appraisal

Most loans require an appraisal to produce a value for the subject property. There are numerous reasons why it may take some time for an appraisal to be completed. For example, there may be a limited number of appraisers in the area, which causes delays. Additionally, the appraisal may be completed in a timely manner but the underwriter may find errors or may request additional comparable sales to support the value. This causes delays as the appraiser has to provide the underwriter with an updated or corrected appraisal.

Final Thoughts

You probably understand how difficult it is to generally state how long mortgage underwriting will take after reading the above. The time can greatly vary from lender to lender and from loan to loan. You can speak with your loan officer to determine your estimated underwriting turn time. They should be able to give you an estimated time for when your loan file will be fully reviewed.

If the underwriting process is taking entirely too long, you may consider switching lenders. However, this may end up causing even more delays in some cases. You can read our article on switching lenders for more information on this topic.