A Guide to the Mortgage Underwriting Process
For most buyers, that means securing a mortgage—and that’s where the underwriting process comes in. Mortgage underwriting is how lenders assess your financial profile and determine whether you qualify for a home loan. While it may sound intimidating, knowing what to expect (and how to prepare) can make all the difference.
Let’s walk through what the mortgage process looks like today, what’s changed in recent years, and how it works whether you’re buying in the U.S. or Canada.
What is Mortgage Underwriting?
Mortgage underwriting is the process lenders use to assess your creditworthiness and decide if you qualify for a home loan. During underwriting, a loan officer or underwriter reviews your financial information—like income, credit score, debts, and employment history—to determine the risk of lending to you. In Canada, this process will be completed by a mortgage specialist or mortgage broker.
It may not be the most exciting part of buying a home, but underwriting is essential for ensuring the loan is a good fit for both you and your lender.
Residence 2 Floor Plan, Dwell Collection, New Haven Community, Ontario, California
How to Prepare for Mortgage Underwriting
Knowing what your lender will need from you and being organized helps ensure a smooth underwriting process. Here’s how to get mortgage-ready:
Review your credit report
Check your credit report for any errors or inconsistencies. In the U.S., you can get one free report per year from each of the three main credit bureaus (Equifax, Experian, and TransUnion). To best keep an eye on things, request your report from a different provider every four months rather than all three at the same time. In Canada, request your report from Equifax Canada or TransUnion Canada.
Get pre-approved
Pre-approval gives you a clear idea of your borrowing power and helps you set realistic expectations before house hunting. It also shows sellers and builders that you’re a serious buyer. During this process, the lender performs a credit check and reviews your income and debts—so it’s a great opportunity to understand where you stand financially.
Organize your financial documents
Gather recent pay stubs, bank statements, tax returns, and proof of assets and liabilities. Keeping both digital and printed copies organized can help avoid delays.
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Lower your debt-to-income ratio
Your debt-to-income (DTI) ratio is a critical factor that can make or break your chances of securing a loan. If possible, pay down any outstanding credit card balances or loans. A lower DTI can increase your chances of approval and may even help you qualify for better interest rates or loan terms.
Be ready to explain any income gaps
Lenders want to see a stable employment history. If you’ve taken time off work, changed industries, or had variable income, prepare a simple explanation with supporting documentation.
Don’t make major financial changes
Avoid opening new credit cards, financing large purchases, or switching jobs during the mortgage process. While it may be tempting to start shopping for new furniture and financing it through the store, opening a new line of credit can affect your credit score and raise a red flag with the lender.
Be patient and responsive
The mortgage underwriting process takes time, and the underwriter may request additional documentation, updates to forms you’ve provided, or further explanation on what you’ve submitted. Be patient and respond quickly to these requests to help keep the process moving smoothly and prevent any delays.
Sheridan II Floor Plan, Single Family Collection, Snowden Bridge Community, Stephenson, Virginia
Tips for Self-Employed or Non-Traditional Buyers
Not every homebuyer has a 9-to-5 paycheck—and that’s okay! If you're self-employed, a freelancer, or earn income from multiple sources, lenders will need a bit more documentation to verify your financial health. Be prepared to provide:
• At least two years of personal and business tax returns
• Year-to-date profit and loss statements
• Bank statements showing steady income flow
• A strong credit profile and solid savings
The key is consistency and transparency. The more clearly you can show your income stability, the better.
Cambridge Floor Plan, Traditional Homes Collection, Easton Park Community, Austin, Texas
How Long Does Mortgage Underwriting Take?
The full mortgage process typically takes 30 to 45 days (four to six weeks) from application to closing, though timing can vary based on your financial complexity and how quickly you respond to lender requests.
Here’s what the timeline often looks like:
The 5 Key Steps in Mortgage Underwriting
1. Pre-Approval
Before house hunting, getting pre-approved helps you understand your price range. You’ll submit basic financial documents, and the lender will do a soft credit check, which usually takes a few business days.
2. Initial Underwriting
Once you’ve made an offer on a home, full underwriting begins. The underwriter reviews your application, verifies employment, analyzes your credit, and assesses your ability to repay the loan. This stage may take 7–10 business days and require additional documentation to be submitted.
3. Conditional Approval
If your application meets the lender’s initial underwriting guidelines, you’ll receive conditional approval. This means you’re approved for a mortgage loan, but certain conditions must be met before the loan can be finalized. These conditions may include providing updated documentation or paying off specific debts.
Conditional approval typically takes one to two weeks, depending on the complexity of the conditions that must be met.
4. Final Approval
Once all conditions are met, your loan receives final approval. You’re now officially “clear to close,” meaning the lender is ready to close the loan and fund the purchase of your new home.
5. Closing
Closing is the final step. You'll sign paperwork, submit your down payment and closing costs, and receive the keys to your new home. The process typically takes a few hours, and you will need to bring a cashier’s check or wire transfer for the remaining down payment and closing costs.
The Mortgage Process in Canada
For Canadian buyers, the mortgage process is similar—but with a few key differences:
• Mortgage stress test: Buyers must qualify for a loan at a higher interest rate (typically the greater of 5.25% or your contract rate plus 2%) to ensure affordability if rates rise.
• Shorter terms, longer amortization: While U.S. buyers often choose between 15- or 30-year fixed loans, Canadian mortgages usually come with shorter terms (e.g., 5 years) and longer amortization (e.g., 25 years), requiring renewal at term-end.
• Pre-approval is strongly recommended: This helps you understand your maximum purchase price and interest rate before shopping.
• Default insurance: If your down payment is less than 20%, mortgage default insurance (from CMHC or private insurers) is required.
• Closing costs: Typically 1.5–4% of the purchase price, including land transfer taxes, legal fees, and title insurance.
Whether you’re working with a bank, credit union, or mortgage broker, make sure they’re familiar with local and builder-specific requirements—especially when purchasing a new construction home.
Westwood Floor Plan, 60' Detached Collection, Heartland Community, Baxter, Ontario
Mortgage underwriting may feel like a waiting game, but being prepared and responsive goes a long way. Whether you’re buying in the U.S. or Canada, knowing what to expect—and working with experienced professionals—can help you feel confident every step of the way.
Ready to take the first step? In the U.S., you can connect with BRP Home Mortgage to get pre-qualified or explore financing options tailored to your needs. In Canada, our sales team can connect you to a preferred lender to learn more.
For more tips on buying a new home, check out our blog resources:
15 vs 30-Year Mortgage: What’s Right for You?
Your Complete Guide to Credit Scores and Buying a Home
Buying a New Build Home: Why You Should & How to Do It
When you’re ready to find your dream home, we’re here to help. Contact us to learn more about our communities, homes, and the financing options available to you. We’ll be expecting you!
The information provided in this blog post is for informational purposes only and should not be considered investment, professional, or legal advice. Please consult a professional before making real estate decisions. Brookfield Residential is not responsible for any actions taken based on the information provided.
