Mortgage underwriting is the final phase of the mortgage process i.e. the stage that the bank or financial institution you are seeking the loan from decides whether your application meets their expectations and standards and therefore approve it or otherwise.

This stage is usually conducted by a professional known as an underwriter and his or her main duty is to find out whether the odds is not against the successful payment of the mortgage loan by an applicant.

Every lending firm has its own procedures that should be followed by an underwriter and he or she will rely on these procedures as well as various computer software to ultimately decide whether there is excessive risk involved if the loan is granted. Depending on his or her decision, a lender will either approve or deny a specific loan application.

One of the most important activities that are carried out during mortgage underwriting is an honest scrutiny of the income which is earned by the loan applicant. This means a borrower’s annual income as well as any sources of money including investments, bonuses, commissions, etc., will be analyzed. Technology is gaining a huge influence in the business world and particularly in the mortgage industry and today there are numerous computer programs being used by underwriters and other professionals to find out the probability that a loan applicant will be able to successfully pay back the loan if granted, based on the applicant’s personal and financial circumstances. This means that an underwriter can just enter the applicant’s information such as debts, wages, credit score and debt into the program and he or she will be given accurate analysis on whether the loan has a realistic chance of being repaid.

Many banks, financial institutions as well as other lending firms are exploring the use of such computer technology to speed up mortgage underwriting as well as many other stages of the overall mortgage process. This is refining the mortgage industry to ensure that bad loans will be minimized greatly in order to prevent lenders from going down just like former US lending giants Fanny Mae and Freddie Mac.