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Step 17: Underwriting and Conditions

An underwriter verifies everything, issues a conditional approval, and you clear the remaining conditions.

Underwriting is where the lender makes the final decision. An underwriter reviews your credit, income, assets, the appraisal, title and insurance against the program's rules.

Conditional approval

Most loans first receive a conditional approval: the loan is approved if you provide a list of remaining items, called conditions. Common conditions:

  • An updated pay stub or bank statement
  • A letter of explanation for a deposit, inquiry or gap
  • Proof that a debt was paid off or a gift was transferred
  • The final homeowners insurance declaration
  • Required repairs from the appraisal, completed and re-inspected

Answer conditions quickly and completely. Each round trip with the underwriter can cost a day or more.

Don't change anything

Until you have the keys:

  • Don't change jobs or reduce hours
  • Don't open new credit, co-sign or finance purchases
  • Don't make large cash deposits or move money between accounts without documentation
  • Don't miss any payments

Lenders re-check credit and employment right before closing. A new debt can push your debt-to-income ratio past the limit.

Once conditions are cleared

When every condition is satisfied, the underwriter issues a clear to close.

Next: remove contingencies.

Your next move, by loan program

  • Conventional: Conventional underwriting follows the automated findings. Changes to income, debt or assets can trigger a re-run with a different result. Check my loan status
  • FHA: FHA underwriters review the appraisal's required repairs. Those repairs become conditions to clear before closing. Check my loan status
  • VA: VA underwriting also checks residual income for your family size and region. Check my loan status
  • USDA: After the lender approves, USDA does its own final review. Allow a few extra days. Check my loan status
  • Jumbo: Jumbo files often go to a manual underwriter with extra review of assets and reserves. Check my loan status
  • Investor: DSCR underwriting focuses on the rent, the appraisal, your credit and reserves, plus entity documents for an LLC. Check my loan status