Underwriting

An appraisal waiver is a decision allowing a mortgage to proceed without a full traditional appraisal in circumstances acceptable to the lender or loan program.

An automated underwriting system is software used to evaluate a mortgage file against lender or program rules.

Clear to close means the lender has finished the key underwriting conditions and the mortgage is ready for final closing steps.

Compensating factors are strengths in a mortgage file that may offset weaker elements in the borrower's overall profile.

Conditional approval means the lender is broadly willing to approve the mortgage if specified outstanding requirements are satisfied.

Conditions to close are the remaining lender requirements that must be satisfied before final approval to fund the mortgage.

A credit report is the detailed record of a borrower's credit accounts and payment history that lenders review during mortgage underwriting.

Loan denial means the lender has decided not to approve the mortgage under the current application or terms.

Manual underwriting is a lender review path that relies more directly on human judgment than an automated system alone.

Occupancy type describes how the borrower intends to use the property, such as primary residence or another occupancy category.

Primary residence is the home the borrower intends to use as the main place of day-to-day living.

Risk-based pricing means mortgage cost can change based on how the lender evaluates the file's risk profile.

Mortgage underwriting terms that explain how lenders verify risk, clear conditions, and decide whether a loan can close.

Underwriting is the lender's process for verifying the file, judging risk, and deciding whether the mortgage can be approved.

Verification of assets is the lender's process for confirming the borrower actually has the funds or liquid resources used in the file.

Verification of employment is the lender's process for confirming that the borrower has the job or work relationship supporting the mortgage file.

Verification of income is the lender's process for confirming that the borrower really earns the income used to qualify.