Mortgage underwriting

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages) This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Mortgage underwriting" – news · newspapers · books · scholar · JSTOR (January 2021) (Learn how and when to remove this message) This article includes a list of general references, but it lacks sufficient corresponding inline citations. Please help to improve this article by introducing more precise citations. (January 2021) (Learn how and when to remove this message) (Learn how and when to remove this message)

Mortgage underwriting is the process a lender uses to determine if the risk (especially the risk that the borrower will default^[1] ) of offering a mortgage loan to a particular borrower is acceptable and is a part of the larger mortgage origination process. Most of the risks and terms that underwriters consider fall under the five C’s of underwriting: credit, capacity, cashflow, collateral, and character. (This is also known in the UK as the three canons of credit - capacity, collateral, and character.)

To help the underwriter assess the quality of the loan, banks and lenders create guidelines and even computer models that analyze the various aspects of the mortgage and provide recommendations regarding the risks involved. However, it is always up to the underwriter to make the final decision on whether to approve or decline a loan.