Last Updated: March 20th, 2022 by
When people buy homes, they typically get financing through a mortgage. Behind the scenes, a mortgage underwriter does the crucial work of assessing mortgage applications and approving the ones for qualified lenders.
This guide will walk you through how to become a mortgage underwriter. You’ll learn what it takes to become an underwriter, as well as the compensation you can enjoy in the role.
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Job Description
As a mortgage underwriter, your job is to assess mortgage loan applications.
You’ll do that by verifying the applicant’s credit history and income to see whether or not they’re a qualified borrower who will repay the mortgage on time and in full.
At the same time, you’ll also review all mortgage loan agreements to ensure they follow state and federal laws and regulations.
Your role will ensure that your employer only gives out mortgages to qualified borrowers when done correctly. That helps avoid losses caused by giving out bad loans that won’t be repaid.
Read More: Banking Jobs. Discover various banking jobs and what it takes to land these careers.
What Does an Average Day for a Mortgage Underwriter Look Like?
One of the most essential parts of learning how to become a mortgage underwriter is understanding what an average day will look like in that role. That way, you can decide whether or not the job is right for you.
Here’s what you’ll spend an average day doing as a mortgage underwriter.
Collecting Documents for Mortgage Applications
The first daily task you must do is to ensure that you have all the necessary documents for the underwriting process.
More specifically, you must have all the documents to support the mortgage applications you’ll spend the day assessing.
To do that, you must work closely with the mortgage loan officers that interact directly with the applicants. They are the people on the front line responsible for collecting completed mortgage loan application documents.
So, suppose there is any information or document that’s missing. In that case, you’ll have to inform the responsible loan officer. Then, they will work with the applicant to get you the documents you need.
Review Mortgage Applications
Once you’re sure you have the documents you need, you can then begin reviewing mortgage applications.
The overall purpose of your review is to find out whether or not the applicant can pay their mortgage on time and in full if you decide to approve their application.
So, you’ll spend some time verifying the documents related to the applicant, their finances, as well as the property they want to buy with the mortgage loan that you might approve.
Verifying Applicant Details
Before diving into the financial aspects, you must first verify the applicant’s details. That means you’ll go over the applicant’s details to verify their identity, credit score, and financial income.
Taking time to verify their identity is crucial to avoid any instances of fraud.
For example, someone might use a false identity to try and get a mortgage from your institution.
Next, you’ll have to verify their credit score and income details. This is one of the most critical steps in the process because it helps you find out if they’ll be able to repay the mortgage on time and in full.
Review Loan Agreements
Besides reviewing applicant details, you’ll also spend a significant part of your day reviewing the loan agreement between your institution and the applicant.
Firstly, you must ensure that the loan details, amounts, and terms are correct. Besides that, you must also ensure the agreement follows all state and federal regulations.
Approving or Rejecting Mortgage Applications
Once you’ve determined that the applicant can repay the mortgage and the loan agreement is correct, you’ll approve or ‘underwrite’ the mortgage loan application.
However, you must reject the application if you find that the applicant can’t afford the mortgage. That way, you help your employer avoid losing money on bad loans, which are mortgages that borrowers can’t repay.
Process for Becoming a Mortgage Underwriter
Your journey of learning how to become a mortgage underwriter will involve a balance of academic learning and real-world experience.
Here’s what the process will look like for you:
1. Start Preparing in High School
Let’s suppose you’re still in high school and you want to pursue a mortgage underwriter career.
In that case, you can give yourself a head start by taking courses like:
- Math
- Statistics
- Economics
- Computer courses for creating spreadsheets
Understanding and mastering these topics early on in your journey will be advantageous. Not only will those skills and knowledge help you in college, but they’ll also be helpful in your day-to-day career.
2. Get a Relevant Degree
Mortgage underwriter employers will expect you to have at least a college degree to work with them. However, there is some flexibility in the type of degree you can have.
For example, mortgage underwriters tend to have degrees in:
- Business Administration
- Finance
- Accounting
- Economics
- Mathematics
So, you should choose a relevant degree that interests you and suits your strengths at this stage of the process.
3. Get a Mortgage Loan Originator (MLO) License
Unlike other loan officers, you will specialize in underwriting mortgage loans in particular. So, your licensing requirements will be different from other loan officers.
In your case, you’ll need to fulfill the requirements set by the National Multi-State Licensing System (NMLS).
There are 4 requirements which are:
- Complete 20 hours of pre-licensure training. Depending on your state, there might be an additional state-level training requirement that you must also complete.
- Take and pass the national test with a test score of 75% or more.
- Undergoing a criminal background check and credit report check.
- Completing 8 hours of continuing education training per year to maintain your license.
4. Get On-the-Job Training
Next, you’ll have to get hands-on underwriter training before you can work as a mortgage underwriter.
Thankfully, your employer will help you with that through on-the-job training. That process will help you understand the practical aspects of your role and a deeper understanding of the rules and regulations you must follow.
So, you don’t have to worry about finding that training by yourself.
5. (Optional) Pursue Mortgage Underwriting Certifications
Once you begin your mortgage underwriting career, you can pursue additional professional certifications.
For example, you can choose to pursue certifications by the Mortgage Bankers Association (MBA) and the American Bankers Association (ABA).
Not only will these certifications equip you with more substantial industry knowledge, but they’ll also serve as credentials that will help you land better jobs and higher salaries.
Are You Suited for a Mortgage Underwriter Career? Skills, Credentials, Tools, and Technology
Besides learning the ins and outs of how to become a mortgage underwriter, there are also several essential skills and proficiencies necessary to succeed in this role.
So, you must have or at least be willing to develop the following traits:
Personality and Skills
When it comes to personality traits and skills, the US Bureau of Labor Statistics (BLS) highlights decision making, detail orientation, and interpersonal skills as crucial for your work as a mortgage underwriter.
Remember: your role is to approve or reject mortgage loan applications. There’s no room for uncertainty, so you must be strong in your decision-making abilities.
To approve or reject mortgage applications, you’ll have to consider a long list of different factors. So, having a strong detail orientation will ensure you don’t miss any crucial factors that might wrongly affect your decisions.
Lastly, interpersonal skills are also significant. Firstly, you’re not the only loan officer involved in the mortgage loan process. Instead, you’ll work alongside other officers who handle different parts of the application process.
Having good interpersonal skills ensures that you can be a good team player with everyone else.
Credentials and Proficiencies
In terms of proficiencies, the Occupational Information Network (O*Net) highlights the importance of knowledge in economics and accounting, mathematics, and law for this line of work.
As a mortgage underwriter, your job is to decide if it’s safe to provide a mortgage to an applicant. You’ll have to understand economics and accounting to figure out if they’ll be able to pay the mortgage back or not.
Besides that, being proficient in mathematics is also crucial to your work that involves a lot of number-crunching.
Understanding relevant laws also matters. That’s because you and your employers in the mortgage lending business are governed by federal laws.
By understanding those laws and keeping yourself up-to-date, you’ll avoid any mistakes that can cause you legal problems.
How Does a Mortgage Underwriter Find Work?
The skills and knowledge you have from learning how to become a mortgage underwriter are helpful for any mortgage lender.
So, you can look for underwriter jobs at employers like:
- Retail banks: Your standard bank offers customers a wide range of financial products, including mortgages. These banks work with the general public.
- Mortgage lenders: Mortgage lenders are financial institutions that only offer mortgages. So, they’ll have a strong need for mortgage underwriters.
- Credit unions: These are non-profit financial institutions owned by the people using their services. For example, credit unions offer mortgage loans, so they hire mortgage underwriters.
No matter where you choose to work as a mortgage underwriter, you’ll be in the institution’s operational or ‘back office’ side.
That means your role does not involve any direct interaction with clients. Instead, you’ll receive mortgage applications brought to you by sales staff who talk to clients directly.
Read More: SunTrust Careers. Explore careers at SunTrust to see if any of the positions are right for you.
How Do You Find Out About Mortgage Underwriter Job Openings?
You can find job openings by searching online or contacting the employer directly.
For example, most employers these days post available job openings online. You can find them by going to the financial institution’s website and checking their Careers or Job Openings page.
Besides that, you can also call or email their Human Resources department directly.
In any case, be sure to submit your CV or resume for them to keep on file. Then, even if they don’t have any available positions right now, they can always refer to your information for future job openings.
How Much Money Do Mortgage Underwriters Make?
An important factor in deciding if you’d like to learn how to become a mortgage underwriter is to know how much you could earn in that role.
According to the US Bureau of Labor Statistics (BLS), loan officers, including mortgage underwriters, earn an average of $76,930 a year.
To give you a more complete picture of your earning potential, the BLS also shows that:
- Those in the top 90th percentile earn an average of $133,850 a year
- Those in the bottom 10th percentile earn an average of $33,650 a year.
Where Can Mortgage Underwriters Earn The Highest Salaries?
The BLS also has data showing where mortgage underwriters can earn the most. According to that data, the 5 highest-paying states for this role are:
- New York: $104,400 a year
- Maryland: $92,060 a year
- Hawaii: $91,880 a year
- Georgia: $86,200 a year
- Missouri: $82,880 a year
How Do You Earn More as a Mortgage Underwriter?
The best way to increase your earning potential as a mortgage underwriter is to pursue professional designations that set you apart from your peers.
For example, you can earn the Certified Residential Underwriter Designation (CRU) from the Mortgage Bankers Association.
Credentials like the CRU and others will set you apart from your competitors and attract more business from clients.
Mortgage Underwriter Job Growth
The US Bureau of Labor Statistics (BLS) projects a 1% growth for loan officers (including those specializing in mortgage underwriting) between 2020 and 2030. The BLS describes that growth rate as making ‘little or no change’ in the number of available mortgage underwriter jobs.
Still, that growth estimate does show that this career path is still a viable choice for you or anyone else interested in learning how to become a mortgage underwriter.
More importantly, that growth estimate suggests that the industry will remain competitive. So, you should try to develop specialist knowledge to set yourself apart from your peers.
For example, you can choose to specialize in underwriting mortgage applications for one or more particular types of real estate.
The 5 Types of Real Estate
As a mortgage underwriter, you’re involved in the process of approving or rejecting loans for people to make real estate purchases. Depending on where you work, you’ll be dealing with 5 types of real estate that borrowers might want money to buy.
Each type of real estate has unique characteristics that will influence your decision to approve the mortgage application.
So, to carry out your duties more effectively, you can choose to develop specialized knowledge in one or more sectors of the real estate industry like:
Residential
Residential property mortgages are those related to properties like homes and condominiums. So, the applications you’ll approve or reject are typically by people looking to buy a house to live in.
Commercial
Commercial property mortgages are used to buy properties for business purposes. So, these mortgage applications will come from people who want to purchase office space, hotels, retail stores, and more.
Industrial
You’ll be assessing mortgage applications for purchasing property for industrial uses in this sector. These will include properties like warehouses and factories.
As you can imagine, the factors you must consider before approving such an application will not be the same as those for residential or commercial mortgages.
Raw Land
In some cases, the applications you’ll underwrite might just be for land and not a physical building. For example, the land could be empty or agricultural land that people buy to produce food and other resources.
Special Use
Last but not least, there are also mortgages for special uses. These include publicly-used real estate like cemeteries and libraries.
Professional Associations
You can’t learn how to become a mortgage underwriter without developing friendships in the industry. One of the most effective ways to do that is to join professional associations like:
National Association of Mortgage Underwriters (NAMU)
Mortgage Bankers Association (MBA)
National Association of Review Appraisers and Mortgage Underwriters (NARAMU)
National Association of Mortgage Brokers (NAMB)
National Association of Professional Mortgage Women (NAPMW)
Top Colleges and Universities
Academically, you can learn how to become a mortgage underwriter through many different degree courses. For example, you could take a degree in Business Administration, Finance, Economics, Mathematics, or something similar.
Here are 5 of the top colleges and universities for fields related to mortgage underwriting:
Wharton School of the University of Pennsylvania
MIT Sloan School of Management
