Quick answer
Underwriting is the lender’s review of your mortgage application to decide whether to approve the loan and on what terms. The underwriter verifies your income, assets, debts and credit history, checks the property’s value, and tests the file against the rules of the agency or investor that will buy or insure the loan.
Key facts
4months
Fannie Mae: oldest a credit, income or asset document can be at closing
Fannie Mae Selling Guide B1-1-03 · Apr 2, 2025
10business days
Fannie Mae: employment re-verified within this many days of closing
Fannie Mae Selling Guide B3-3.1-04 · Oct 7, 2026
What the underwriter checks
The federal ability-to-repay rule requires most lenders to make a reasonable, good-faith determination that you can repay, so they must consider and document your income, assets, employment, credit history and monthly expenses. In practice that means pay stubs, W-2s or tax returns, bank statements, a credit report and an appraisal. On a Fannie Mae loan, those documents can be no more than 4 months old on the note date, and your employment is re-verified within 10 business days before closing.
Possible outcomes
Most files run through automated underwriting first, and an underwriter then reviews the findings. The result is an approval, a conditional approval listing what’s still needed (a letter explaining a credit event, a missing bank statement, a payoff), a suspended file waiting for information, or a denial, which must come with an adverse action notice. Clearing conditions quickly keeps your closing date on track. Because the lender can re-check your credit and job before closing, avoid new debt, job changes or large unexplained deposits until the loan funds. The pre-approval guide shows how to get the file ready early.
Related terms
Sources
- Fannie Mae Selling Guide B1-1-03 — Fannie Mae: credit, income, employment and asset documents may be no older than this on the note date (Apr 2, 2025)
- Fannie Mae Selling Guide B3-3.1-04 — Fannie Mae: employment re-verified no more than this many business days before the note date (Oct 7, 2026)
- CFPB: What is the ability-to-repay rule?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.