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How to Become a Mortgage Underwriter

Is a mortgage underwriter a good career? If you have always wanted to work in the financial sector, becoming a mortgage underwriter is one of the most lucrative career paths that you can pursue. Lenders will always require the services of mortgage loan underwriters so that they can give their professional advice before any mortgage loan application is approved or declined. In this guide, we shall discuss the education, certification, and necessary skills that are needed for one to become a proficient mortgage underwriter.


Who is a mortgage underwriter?

A mortgage underwriter works closely with mortgage lenders to determine whether a homebuyer’s mortgage loan application will be approved or declined. The mortgage underwriter analyzes potential homebuyer’s financial status to determine whether they fall within the acceptable risk range and qualification criteria.


The process begins with the mortgage underwriter examining the three “Cs” of the mortgage application process. They include;

a) Credit reputation- Borrower’s credit score and credit history.

b) Capacity- Borrower’s ability to repay the loan based on their current salary, savings, and debt-to-income ratio.

c) Collateral- Estimated risks based on the amount of down payment raised as well as the value of the property securing the loan.


There are certain conditions that need to be met and that’s the criteria that a mortgage loan underwriter uses to determine whether to approve, suspend, or even decline prospective homebuyers loan application requests.


How to Become a Mortgage Underwriter


Although there is no specific career path that one must go through to become a mortgage underwriter, there are certain skills that you need to learn to excel in this field. The best preparations for a rewarding career in mortgage underwriting can be summarized in the following steps:


1. Get the relevant mortgage underwriter education


Proficiency in mathematics and data analysis skills is very important when it comes to mortgage underwriting. You can start with the basics and advance your studies by pursuing a bachelor’s degree in business or finance. There are also great certificate programs in finance that can help prepare students for their future careers in the areas of financial management, financial statement analysis, and financial markets.


2. Get a mortgage underwriting operating license


All mortgage loan officers are supposed to meet their state’s minimum requirements for a mortgage loan originator (MLO) license. To qualify, candidates must pass the background and credit check. There are also 20 hours of coursework that is undertaken before the issuance of the underwriter license is done.


3. Get the necessary certification


Getting a professional certification is an added advantage for any student who wishes to become a mortgage underwriter in the future. In the U.S, certification for professional mortgage underwriters is conducted under the National Association of Mortgage Underwriters (NAMU). It offers two primary certification options. They are:

a) Certified Mortgage Underwriter (NAMU-CMU) - Candidates are required to undergo a minimum of 12 hours of training. A 30 question exam is conducted and every candidate must score 85 percent or higher to get the certification. A criminal background check is also carried out.

b) Certified Master Mortgage Underwriter (CMMU) - This is an advanced certification option and it requires a minimum of 24 hours of training. The candidate must score a minimum of 85 percent to qualify and also pass the criminal background check.


4. Acquire on-job training skills


After one has successfully secured a position as a mortgage underwriter, it’s necessary to undertake some on-the-job training sessions for a few months in the trainee position. Working as an assistant will put you in a good position to be trained by experienced loan officers in your organization or lending institution.


If your company uses a particular underwriting software program, you will be trained on how to use it. You will gain all the key entry-level experience to help you discharge your duties as a trainee or in an assistant position effectively. Common financial institutions that hire mortgage underwriters include; banks, mortgage broker firms, and credit unions.

Other necessary skills that you will also need to learn in order to excel in your mortgage underwriting career include; networking, analytical skills, good decision making, and being a team player.


Roles of a mortgage loan underwriter


The primary role of a mortgage loan underwriter is to examine the creditworthiness of a potential homebuyer and determine whether they can manage to repay the mortgage or not. If the mortgage underwriter is satisfied that the borrower is eligible for a mortgage loan after conducting the risk analysis, the loan applications are then handed to the relevant loan processors to undertake the necessary documentation.


A mortgage underwriter can also perform other related duties including:

· Gathering and verifying all the financial information from borrower’s applications

· Approving or denying loan applications

· Preparing suitable mortgages for residential or commercial properties

· Ensuring that all mortgage loans that are issued are in strict adherence to laws and regulations


Once you start working as a mortgage loan underwriter, it’s always advisable to advance your skills in various lending systems so that you can remain competitive and up-to-date with the current real estate and financial markets.

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