Last reviewed: 3 October 2026
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How mortgage underwriting works
After you apply, the lender checks what you told it. This page explains the steps the CFPB describes and the records Regulation Z says a lender may use to check your income and assets.
What this term means: Many people call the lender’s checking stage “underwriting.” That label is our plain-language gloss; the CFPB application page does not use the word. Regulation Z’s own wording is that the lender, which it calls the “creditor,” must make “a reasonable and good faith determination” at or before consummation that you will have a reasonable ability to repay.[2] “Consummation” is the regulation’s term for the point at which you become obligated on the loan. “Verify” here means check against records from a source other than you (our gloss).
The steps the CFPB describes
- You give the lender six pieces of information: your name, your income, your Social Security number (so the lender can check your credit), the address of the home, an estimate of the home’s value, and the loan amount you want.[1]
- You do not have to provide documents to get a Loan Estimate. The CFPB says it is a good idea to share what you have, because the more information the lender has, the more accurate the Loan Estimate will be.[1]
- The lender must send the Loan Estimate within three business days of receiving the six pieces.[1]
- When you are ready to choose an offer, you must tell the lender you want to proceed. If you do not do so within 10 business days, the lender may revise the Loan Estimate or close your application as incomplete, and you may need to start over.[1]
- The 10 business days run from when the lender delivers the Loan Estimate or places it in the mail, whichever is earlier.[1]
- Once you have said you want to proceed, the lender may ask for additional information and documents to verify what you submitted. It processes them and may follow up for more information or clarification.[1]
- When the lender has everything it needs, it approves or denies the application.[1]
Our guides to reading your Loan Estimate, the TRID disclosure timeline and the adverse action notice you receive if you are denied cover the documents on either side of this stage.
What Regulation Z says the lender must consider
Unless an exception applies, the lender must consider eight things, listed in § 1026.43(c)(2).[2]
- Your current or reasonably expected income or assets, other than the value of the home that secures the loan.
- Your current employment status, if the lender relies on income from your employment.
- Your monthly payment on the loan.
- Your monthly payment on any simultaneous loan the lender knows or has reason to know will be made.
- Your monthly payment for mortgage-related obligations.
- Your current debts, alimony and child support.
- Your monthly debt-to-income ratio or residual income.
- Your credit history.
Our ability-to-repay guide explains the rule itself, qualified mortgages and where the rule does not apply.
How the lender checks what you told it
The regulation requires the lender to verify the information it relies on using reasonably reliable third-party records, with three adjustments.[2]
- Income or assets must be verified as paragraph (c)(4) describes.[2]
- The lender may verify your employment status orally if it prepares a record of the information it obtained.[2]
- If the lender relies on your credit report to verify your debts and your application states a debt the report does not show, the lender need not independently verify that debt.[2]
For income or assets, the regulation says a lender may verify income using an IRS tax-return transcript, and it lists these examples of other records.[2]
| Paragraph | Example record named in § 1026.43(c)(4) |
|---|---|
| (i) | Copies of tax returns you filed with the IRS or a State taxing authority[2] |
| (ii) | IRS Form W-2s or similar IRS forms used for reporting wages or tax withholding[2] |
| (iii) | Payroll statements, including military Leave and Earnings Statements[2] |
| (iv) | Financial institution records[2] |
| (v) | Records from your employer or a third party that obtained information from the employer[2] |
| (vi) | Records from a federal, state or local government agency stating your income from benefits or entitlements[2] |
| (vii) | Receipts from your use of check cashing services[2] |
| (viii) | Receipts from your use of a funds transfer service[2] |
What documents will my lender ask for?
Neither source gives a full list of the documents every lender will request. The regulation calls the records above “examples.” The CFPB says only that the lender “may” ask for additional information and documents. Ask your lender, in writing, for the list it needs for your loan.
How to verify this yourself
Read the CFPB application page and the regulation text in the reference list; they are the source for every statement above. In the regulation, see § 1026.43(c)(2) for what the lender considers and (c)(3) and (c)(4) for verification. The CFPB’s Loan Estimate and the lender’s later requests are your own record of what was asked and when. To check the person you are working with, use our guide to verifying a loan officer’s NMLS license. Our published standard covers how we check loan originators, and the Register shows that method; neither reviews a lender’s decision on your application.
What this page does not cover
This page is general information, not legal advice. It cannot tell you which documents your lender will ask for or why a lender decided as it did. It describes the general repayment-ability rule; the regulation exempts some loans, and government-backed loan programs have their own requirements that are not covered here. The CFPB page was last reviewed 11 September 2024. This page was last reviewed 3 October 2026.
Your next step
Ask your lender for a written list of what it still needs, and note the date the Loan Estimate was delivered so you know when your 10 business days end. Then return to the Mortgage help library for related guides.