What is Underwriting: Understanding Real Estate Vocabulary

This is the process that involves evaluating the property, the borrowers credit, and their ability to pay the mortgage. Simply put, it is the process used to determine loan eligibility and approval.

Underwriting guidelines vary loan program to loan program. The borrow and property will need to meet certain guidelines that go along with the loan program. Government backed loans like FHA, RD and VA can have stricter guidelines as far as the house is concerned but looser guideline when it comes to qualifying the borrower. Conventional loans have looser guidelines for the house but more strict guidelines for the borrower.