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What Is a Mortgage Underwriter?

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A mortgage underwriter is a pivotal person in the process of taking out a loan to buy a home. Simply put, they approve or reject a borrower’s loan application. A mortgage lender looks to an underwriter to judge whether it would be assuming too much risk if it lets an applicant borrow money. In this guide, we’ll cover:

What Does a Mortgage Underwriter Do?

A mortgage underwriter is a bit like a detective—they investigate the finances of someone applying for a mortgage.

Just like an insurance underwriter, much of the digging done by a mortgage underwriter involves reviewing documents supplied by the applicant or ordered by their employer—in this case, the mortgage lender. These documents include bank statements, tax returns, W-2 forms, and credit reports.

When going over these documents, a mortgage underwriter will determine:

  • How much the applicant earns. The underwriter wants to know whether the applicant steadily has enough money to make monthly mortgage payments.
  • How much the applicant’s assets are worth. These assets might be kept in checking accounts, savings accounts or investment accounts, for instance.
  • How much debt the applicant is carrying. If an applicant has too much debt, this might prompt an underwriter to reject a mortgage application.
  • How well the applicant handles credit. For instance, what is the applicant’s track record when it comes to paying bills on time? And what is the applicant’s credit score? An applicant with a strong credit history is more likely to be approved for a mortgage than someone with a weak credit history.
  • Whether the home’s value makes it a good piece of collateral in case the lender must foreclose on the property.

It may take several days to weeks for an underwriter to review an applicant’s information and decide whether to move ahead with a loan. In some cases, an underwriter might suspend someone’s application until they can obtain additional information, such as income details.

How to Become a Mortgage Underwriter

Somebody who wants to follow this career path doesn’t need to earn a formal degree, although an employer typically will want you to have at least a high school diploma or a GED. Some employers might require an associate’s or bachelor’s degree in business or finance. Some schools even offer programs that are tailored for these professionals.

Aside from needing to meet education requirements, prospective employees usually must gain some on-the-job experience. This experience might come through an internship or entry-level job. Some employers might ask for two to four years of related work experience.

“There are no specific degrees needed to become a mortgage underwriter,” says Eric Jeanette, owner of Dream Home Financing and FHA Lenders. “In most instances, the training starts by working as a loan processor. That role helps gain an understanding of what underwriters are looking for, and it prepares you well to take on the job of an underwriter in the future.”

Licensing/Certification Requirements

Generally speaking, a mortgage underwriter who works for a licensed mortgage company does not need a license. However, those working as independent contractors do.

Under the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), you will also need a license if you perform loan origination services. So, for instance, loan officers, who are typically an applicant’s primary point of contact with a mortgage lender, must complete the licensing process.

Given that stipulation, a mortgage license can open up opportunities for career advancement. You can find your state’s specific requirements through the Nationwide Mortgage Licensing System and Registry (NMLSR).

To advance their career, these professionals also might want to pursue certification from the National Association of Mortgage Underwriters (NAMU). Here are three examples:

  • To earn the Certified Mortgage Underwriter (NAMU-CMU) certification, an underwriter must complete four online training courses through CampusUnderwriter and follow NAMU’s Code of Ethics. They also must pass a 30-question online proctored exam with a score of at least 75%.
  • To earn the Certified Master Mortgage Underwriter (NAMU-CMMU) certification, an underwriter must complete seven online training courses through CampusUnderwriter and follow NAMU’s Code of Ethics. They also must pass a 30-question online proctored exam with a score of at least 75%.
  • To earn the Certified Ambassador Mortgage Underwriter (NAMU-CAMU) certification, an underwriter must complete 12 online training classes through CampusMortgage and follow NAMU’s Code of Ethics. They also must pass a 30-question online proctored exam with a score of at least 75%.

Four other NAMU certifications are available. These include the Certified in Mortgage Regulatory Compliance (NAMU-CMRC), Certified FHA Manual Underwriter (NAMU-CFMU), Certified Mortgage Quality Control Specialist (NAMU-CMQCS), and Certified in Commercial Underwriting & Processing (NAMU-CUP).

NAMU certification, offered only to U.S. residents, does not substitute for state or federal licensing/certification requirements.

How Much Does a Mortgage Underwriter Make?

According to Glassdoor, an online platform for job postings and employer reviews, the estimated base pay for mortgage underwriting professionals in the U.S. is $70,631 a year. On top of that, they can typically make $12,191 a year in bonuses, commissions, and other extra pay.

Jeanette says highly successful mortgage underwriters can easily pull in $120,000 a year.

“Mortgage underwriting can be a very good and stable career. It is a critical position within the mortgage process, and top-performing underwriters will likely have job security for a long time,” Jeanette says.

Are you curious about the day-to-day duties in common financial services roles? Check out Forage’s course catalog of free virtual work experience programs.

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John Egan is a freelance writer and content marketing strategist in Austin, Texas. His