Underwriting
The lender’s detailed verification and risk assessment of your application. An underwriter reviews income, assets, credit history, appraisal, and title before issuing a final approval (or a conditional approval with remaining items to clear). This is where documentation gaps surface — which is why self-employed borrowers benefit from organizing their file before applying.
How does this affect your loan? Estimate self-employed qualifying income with the
DTI calculator, or read the
self-employed mortgage guide.
Related terms
- Compensating factors — Strengths in your application that offset a weakness elsewhere. Common examples: large reserves offsetting a h…
- Overlays — Lender-specific requirements stricter than the minimum guidelines set by Fannie Mae, FHA, or the non-QM progra…
- Conforming loan limit — The maximum loan Fannie Mae and Freddie Mac will purchase. For 2025, the baseline limit is approximately $806,…
- Reserves — Liquid funds you must demonstrate after closing — not applied to the down payment or closing costs. Measured i…
- CPA letter — A signed statement from a licensed CPA confirming business type, continuity of operation, or ownership percent…
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Sources
Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.