Mortgage Underwriter Definition
When a financial institution extends money for a home loan or mortgage, the institution puts itself at risk, as the borrower may not pay for the loan. Mortgage underwriters are the professionals responsible for minimizing this risk as much as possible.
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Function
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Mortgage underwriters evaluate a mortgage application in order to decide whether or not to grant a mortgage to a customer.
Types of Factors
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Mortgage underwriters analyze the applicant's income, work experience, credit history and other debt obligations. In addition, underwriters ensure the amount of the home that secures a mortgage is worth enough to cover the amount owed if the borrower fails to pay.
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Features
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Mortgage underwriters typically use computerized systems that rate applicants in certain categories and produce a score. If the customer does not meet the score, the underwriter may have the power to override the system, but is then held responsible if the borrower defaults.
Education
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Most employers prefer mortgage underwriters to have a bachelor's degree in a field like business or finance. In some cases, financial institutions will consider applicants with a bachelor's degree in other fields when combined with lending experience.
Compensation
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In November 2009, the average annual salary for mortgage underwriters was $52,000, according to Indeed.com.
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