What Underwriters Look for When Purchasing a Home
When buying a home, underwriters play a crucial role in the loan approval process. Their job is to assess risk and ensure that a borrower meets the lender’s guidelines. Here’s a breakdown of what underwriters review before approving a mortgage:
Credit History & Credit Score
✅ Minimum Score Requirements – Most lenders require a 620+ for conventional loans, while FHA loans can go as low as 580 (sometimes 500 with higher down payment).
✅ Late Payments – Recent late payments, especially in the last 12 months, can be a red flag.
✅ Credit Utilization – Keeping credit card balances below 30% of the limit helps approval chances.
✅ Collections & Charge-Offs – Large unpaid collections, especially medical or tax liens, may need to be paid off.
✅ New Credit Accounts – Opening new credit lines before closing can hurt approval.
