What is underwriting in mortgages?

Key takeaways

• Mortgage underwriting is the process by which lenders evaluate your financial stability and the property's value to determine loan eligibility.
• You will need to provide proof of income (like SA302 forms for self-employed), bank statements, and credit reports.
• Underwriters look for consistent income, large transfers, and "red flags" like overdraft usage or gambling.
• The lender also evaluates the property type and condition to ensure it is a sound investment.
• The process typically takes anywhere from a few days to two weeks, depending on complexity.

What does a mortgage underwriter do?

Underwriting in mortgages is the process by which a lender evaluates your affordability to determine if you can qualify for a mortgage, and if so, what deal they can offer you. A mortgage underwriter is the person who carries out this review process. As part of their assessment, they look at your creditworthiness as well as your financial stability, including your earnings and outgoings. However, there will be levels of automation in every lender’s underwriting process as well.

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How does the mortgage underwriting process work?

During underwriting, your mortgage application will be reviewed, and the information you’ve provided about your income, outgoings, credit rating etc, will be verified. You will need to provide documentation for this part, for example, providing bank statements and payslips.

If you are self-employed (sole trader or limited company), you will typically need to provide:

• Self Assessment Tax Calculation (SA302) forms
• Tax year overviews
• Latest 3 months of business bank statements
• Latest 3 months of personal bank statements

The lender will use all this information to understand your financial situation and decide whether they can offer you a mortgage, and on what terms. Find out more about mortgages for the self-employed here.

Lenders will also check your credit score using one of the three main credit referencing agencies, Experian, Equifax and TransUnion, or they might use their own credit scoring model. This is to determine how likely you are to repay a mortgage loan and how proficient you are at handling debt. See your credit rating across all three agencies with a report from CheckMyFile.

They'll also carry out fraud and money laundering checks to verify where your income and deposits have come from. If you have a gifted deposit, for example, from a loved one, they may ask for additional details about where this money has come from.

Lastly, they will ask for information about the property you want to buy. Some property types are deemed too high-risk by lenders to offer mortgages for. As well as checking the property’s value, they may also check what type of property it is, the construction type, method and materials used, as well as if there are any defects.

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Do all mortgage applications go through underwriting?

Most mortgage applications go through underwriting, though not all of them will be reviewed by a human underwriter. Some mortgage lenders may underwrite their own mortgages, or only use underwriters in applications that require specialist experience, such as applicants with complex incomes or bad credit. For most lenders, underwriting is an essential part of the mortgage process; it's how they make sure you meet their lending criteria and can comfortably afford the mortgage.

What do mortgage underwriters check on bank statements?

Mortgage underwriters will review your bank statements carefully to understand your financial habits. They will specifically look for:

• Consistent income: Regular salary deposits that match your application.
• Large transactions: Unexplained lump sums moving in or out of accounts.
• Financial red flags: Overdraft usage, late payment fees, or excessive discretionary spending. Find out more here.

It's a good idea for applicants to be careful with their spending habits in the lead-up to applying for a mortgage.

Can mortgage underwriters make exceptions?

Yes, mortgage underwriters can make exceptions, though this doesn't happen very often. Their job is to assess risk accurately while also working out whether they can help you get approved for a mortgage.

How long does mortgage underwriting take?

The time it takes for mortgage underwriting to be completed can vary. As of early 2025, most lenders complete underwriting in 5-10 business days, though it can take as little as a few days or extend to a couple of weeks. Factors such as the number of applications being processed by the lender and the complexity of your application will impact the timeline.

Next up: What can I do if my mortgage application is declined?

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