By Pietro Carcassi | ABR, HFR | Your Italian Real Estate Expert in San Diego
Your offer has been accepted—congratulations! At this point, many buyers think the hard part is over. In reality, one critical step still stands between you and the keys: mortgage underwriting.
This is where pre-approval turns into real funding.
WHAT IS MORTGAGE UNDERWRITING?
While pre-approval gives you a preliminary green light based on your financial profile, underwriting is the comprehensive, in-depth verification process that happens after you're under contract. An underwriter meticulously reviews every aspect of your finances, employment, assets, and the property itself to ensure the loan meets lending standards and that you can truly afford the mortgage.
Think of pre-approval as permission to shop.
Underwriting is the final approval to close.
THE UNDERWRITING TIMELINE: WHAT HAPPENS DURING ESCROW
Underwriting typically takes 3–5 weeks and runs alongside escrow. Here's what to expect:
WEEK 1: LOAN SUBMISSION
Once your offer is accepted, your loan officer submits your complete loan package to the underwriting department. Have these documents ready:
- Complete employment verification and recent pay stubs (2–3 months)
- Two years of tax returns and W-2s
- Bank statements for all checking and savings accounts
- Asset documentation (retirement accounts, investments, savings bonds)
- Credit report and written explanations for any credit issues
- Purchase contract and property information
- Proof of identity and Social Security verification
WEEKS 2-3: UNDERWRITER REVIEW
The underwriter performs a "deep dive" into three critical areas:
- Financial Capacity: Verifying your debt-to-income ratio and your ability to make monthly mortgage payments while managing existing obligations.
- Credit Worthiness: Scrutinizing your credit history for red flags, recent late payments, new debts, or collections that emerged since pre-approval.
- Property Value: Reviewing the appraisal to ensure the home is worth what you're paying. A low appraisal can impact your loan approval.
WEEKS 3-4: CONDITIONAL APPROVAL
Most buyers receive a "conditional approval" at this stage. This means the loan is approved pending a short list of additional items, such as:
- Updated pay stubs or bank statements
- Letters of explanation for large deposits or financial changes
- Verification of gift funds from family members
- Proof of homeowner's insurance
- HOA documents and financial statements (for condos)
- Resolution of any title issues
WEEKS 4-5: CLEAR TO CLOSE
Once all conditions are satisfied, you receive "Clear to Close" status. The lender is ready to fund your purchase, loan documents are prepared, and you're scheduled to close.
CRITICAL RULES DURING UNDERWRITING: WHAT NOT TO DO
This is where many buyers unintentionally create problems. During underwriting, you must maintain the financial status you had when pre-approved. Avoid these mistakes at all costs:
- ❌ DON'T change jobs or become self-employed (even if it's a raise)
- ❌ DON'T make large purchases or open new credit cards (no new cars, furniture, or appliances)
- ❌ DON'T make large deposits without documenting their source (gift letters, inheritance, etc.)
- ❌ DON'T pay off collections without consulting your loan officer
- ❌ DON'T co-sign loans for anyone
- ❌ DON'T close credit card accounts
Even seemingly innocent actions can change your debt-to-income ratio and jeopardize your approval. When in doubt, ask your loan officer before you act.
PRE-APPROVAL VS. UNDERWRITING: THE KEY DIFFERENCE
| Aspect | Pre-Approval | Underwriting |
|---|---|---|
| Documentation | Self-reported information and credit check | Full documentation and third-party verification |
| Scope | Preliminary assessment of borrowing capacity | Final approval for specific loan and property |
| Timeline | 1-3 days to obtain | 3-5 weeks to complete |
| Validity | Valid for 60-90 days | Happens during escrow after contract |
| Purpose | Gives you buying power | Determines if lender will fund purchase |
THE BOTTOM LINE
Underwriting is the bridge between your accepted offer and closing day. While it can feel intense—with document requests and verification calls—it's a structured process designed to protect everyone involved.
Buyers who understand underwriting and work with professionals who communicate clearly experience far fewer surprises. Stay responsive to your loan officer's requests, maintain your financial status, and don't make major financial moves during escrow.
If you're planning to buy in San Diego, I'll guide you from pre-approval through underwriting and all the way to closing, working closely with trusted local lenders to keep the process smooth and on track.
Ready to start your home buying journey?
Contact Pietro Carcassi today to discuss your San Diego home buying goals.
*Disclaimer: Appointment with Loan Officer is required.
Pietro Carcassi
Coldwell Banker Realty – Del Mar
