Automated underwriting recommendation signaling that the file does not support a routine automated approval path.
Refer with Caution is an automated underwriting recommendation signaling that the submitted mortgage file does not support a routine automated approval path as entered.
Refer with Caution matters because it is not just a minor document request. It usually means the automated system is not comfortable recommending the file under the submitted structure. The lender may need a different program, corrected data, more supporting documentation, manual review, or a denial decision.
Borrowers should not read it as a final denial by itself, but it is a serious warning that the loan is not moving as cleanly as a favorable automated result.
Borrowers may hear this term after a lender runs the file through Desktop Underwriter or another Automated Underwriting System (AUS). It can happen during preapproval, full underwriting, or after resubmission.
The result often triggers a closer look at income, debts, credit, assets, property, occupancy, or program fit.
| Next step | Why it may happen |
|---|---|
| Correct data and rerun AUS | The file may have been entered incorrectly or incompletely |
| Change loan structure | Down payment, loan amount, program, or borrower structure may need adjustment |
| Consider Manual Underwriting | Some programs allow a deeper documented review path |
| Issue Loan Denial | The lender may not be able to approve the file as structured |
A borrower has a high debt load and limited reserves. The lender runs AUS and receives Refer with Caution. The lender reviews whether corrected income, lower debt, more assets, or another loan path could change the result.
Refer with Caution differs from Approve/Eligible because Approve/Eligible is a favorable automated recommendation, while Refer with Caution signals the file needs a different path or deeper review.
It differs from Loan Denial because denial is the lender’s decision not to approve. Refer with Caution is a system recommendation that may lead to denial but is not identical to it.
It also differs from Ineligible Recommendation because ineligible focuses on program or eligibility mismatch, while Refer with Caution is a risk or recommendation issue.