Updated: December 17, 2021

Mortgage Underwriting in the UK

Has your mortgage application been referred to an underwriter? Find out how long the mortgage underwriting process takes and more in our in-depth guide.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 17, 2021

Mortgage underwriting is the part of the mortgage application process when your lender conducts all the financial checks on you and on the property you want to buy to decide if you are an acceptable risk when compared to their lending policy.

This article explains the purpose and process of mortgage underwriting and will cover the following points:

What does a mortgage underwriter do?

The mortgage underwriting process is managed by an experienced lending assessor to carefully and thoroughly review the level of risk the lender would be taking in offering you a mortgage. The underwriter will scrutinise your mortgage application, looking at all the information you provided about your income, expenses, the amount you want to borrow and the value of the property you want to purchase.

Do all mortgages go for underwriting?

Not all of them are done manually. Whilst some mortgages do not go to an actual underwriter and are approved automatically by computer, the more complex your circumstances, the higher the chance of having your mortgage application referred for manual underwriting.

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Information underwriters look for

The assessment made by mortgage underwriters may vary from lender to lender but the following areas are commonly reviewed.

1. Do you meet the lending criteria?

Every lender will have a different policy about who they will lend to depending on your age, legal status, employment status, tax status, the amount of deposit you have and many other requirements.

2. Creditworthiness

The mortgage underwriter will assess your previous credit history against their own lender-specific credit scoring. Applicants are unlikely to know how different lenders calculate credit scores so it’s important to regularly review your credit score with the main providers (Experian, Equifax and Transunion) and keep your score as high as possible.

3. Affordability

Your ability to make repayments will be determined by the mortgage underwriter taking into account your income and monthly expenses. Mortgage loan amounts are usually calculated using an income multiplier but there may also be other specific affordability criteria that the lender requires. As part of this affordability check, the Financial Conduct Authority requires underwriters to assess whether mortgage repayments would remain affordable for a borrower in the first five years of the term if interest rates were to rise by 3%. This is known as the affordability stress test.

4. The Property

Mortgage underwriting process includes checking that the property you want to buy is in good condition and is worth what you have offered to pay for it. Lenders will be reluctant to offer mortgages on properties that are defective, are not constructed according to building regulations or simply aren’t worth the price you have agreed with the vendor.

5. Anti-fraud and anti-money laundering

The mortgage underwriter will need to understand where you sourced the funds for your deposit so they will look for evidence on your bank account statements. Large deposits which come from an unclear source is likely to be a red flag for a mortgage underwriter.

How long does the underwriting process take?

Whilst there’s no definitive period, it generally takes around 4-7 working days. If the circumstances are more complex, the process could take longer.

You can help to minimise the time this takes by ensuring that you complete every box on the application form and provide all the necessary documentation with the application.

What is a mortgage application referral?

Sometimes a mortgage underwriter may be unable to make a decision on your application and will refer your case to a more senior underwriter. Some of the circumstances under which your mortgage application may be referred include:

  • Income is unclear or cannot be verified
  • Identity or financial documents cannot be verified
  • Unclear as to whether you meet all the eligibility criteria
  • Problems with the property valuation
  • There is something in your credit file which the mortgage underwriter is unsure about and therefore refers you for further checks.

What happens if your mortgage application is declined

The mortgage application may be declined for a range of reasons such as poor credit history, lack of affordability, insufficient deposit, low property valuation, too much debt and too many other recent mortgage applications. Alternatively, it could simply be that the lender doesn’t make loans to people in your situation. e.g. self-employed or it could even be an error, so it’s always worth following up.

Try to find out why your application was rejected so that you can work on fixing the issues before you make any subsequent applications to the same or other lenders. You can increase your chances of a successful application by working with a specialist mortgage broker who can identify the lender that is best suited to your situation.

You may need to make some changes to your finances before you re-apply, such as paying off a debt, setting up direct debits so you don’t accidentally miss payments or consolidating various debts into one payment that’s lower and at a better interest rate. Finally, you may also need to reassess your aspirations and consider buying a smaller home that requires a lower deposit amount and monthly repayments.

To find out what the best course of action is and boost your chances of salvaging your plans, speak to a mortgage broker – see the next section to find out how to choose the right one.

How a mortgage broker can help

Mortgage brokers can help you to identify the right mortgage lender for you, boost your chances of passing the underwriting assessment and help you get your application back on track if you’ve failed them.

Using a mortgage broker can shortcut the application process for you, saving you time, money and frustration. We can put you in contact with our large network of fully qualified and vetted brokers to ease the mortgage application process for you. By using our free broker-matching service, you can rest assured that you’ll be paired with a mortgage advisor who has the exact knowledge and expertise you need.

Call us on 0808 189 0463 or make an enquiry to set up a free, no-obligation chat about your mortgage needs.

Ask a quick question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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