Mortgages.scot

Have you ever wondered what it's like to be a Mortgage Underwriter? The answer to that is probably no unless of course you already work in the mortgage industry and have seen others in the role or perhaps there is a role advertised. This guide is intended to give you a view based on my last 13 years in that role.

Two types of mortgage underwriter

There are generally two types of mortgage underwriters today, automated and manual. One is not only more complex than the other but also higher paid. Let's look at them both in a bit more detail.

Automated underwriting

This is the way the bulk of mortgages in the UK are processed. It's for non-complex mortgage applications. Typically that would be one or two applicants, employed, have pay slips, bank statements and a searchable credit history.

Most Banks nowadays allow a mortgage application to be made online, either by the applicant or a broker representing them. All of the required information is entered through online forms and supporting documents such as pay slips and bank statements are uploaded.

A system will run credit searches and analyse the information entered online. It will make a decision based on that information.

The role of an underwriter in this environment is to check the documentation, make sure it matches everything entered on the forms and confirm. If not then the underwriter will make necessary adjustments and ask the system to reassess.

Very much a computer says yes or no.

If the computer declines the application it may be possible for that underwriter to look more closely at the decision of the computer and override it. Often, it may mean referral to a more senior underwriter to consider the application further.

The majority of automated underwriting roles are most often available to internal applicants working within the mortgage process already and have a decent level of process knowledge. It's rare for roles to go externally to someone who has no experience.

Having looked at available roles the salary for automated underwriters is between £24,000 and £35,000 depending on experience and complexity of the role. Take a look at LinkedIn to see what is available and the salaries on offer.

Manual Underwriting

The process here is much the same in terms of process but there is no system making a decision, the underwriter decides. That is why it's called manual. You would still receive an application form with all of the supporting documentation. There will be some system support to carry out credit and fraud searches but everything else falls to the underwriter.

I am a manual underwriter. I work for a Private Bank where manual underwriting is key. The reason for that is simply that systems can't make the decisions on cases I receive. Why?

Clients have non-standard income.

Self-employed with financial accounts.

Income in a currency other than GBP.

Income is received from trusts.

Using investment income from shares to meet affordability.

Interest Only mortgages have non-standard repayment strategies

Selling other property

Using cash or investments

Using the sale of commercial property

Selling a business and will repay from the proceeds

A system can't read financial accounts in a way a human can to be sure that a client can draw enough income from that company to meet affordability. Neither can it deal with understanding share prices and investment returns. So it requires a manual underwriter to examine all of these in more detail.

The result of all that manual analysis may be that the underwriter enters all of the figures he or she determines to be usable into a tool which then provides a decision.

The responsibility for manual underwriting is far greater than automated. You need to retain a lot of information and refer to internal policies and guidance to ensure the right decision is made.

These types of roles are only going to be available to internal applicants who are already underwriters, probably using an automated process and moving up to the next stage or external candidates who already have years of experience in that role.

Having also looked at available roles the salary for automated underwriters is between £35,000 and £75,000 depending on experience and complexity of the role. Take a look at LinkedIn to see what is available and the salaries on offer.

The downside in case you missed it

Mortgage underwriter roles are not something you can get straight into with no experience. You are either in a role within a company at present with transferable skills and training available or you are already a mortgage underwriter with sufficient experience to apply for a new role at a different company.

There are occasional exceptions where companies actively recruit apprentices or graduates who eventually end up in an underwriting role.

The chances of being able to secure a mortgage underwriting role with no experience whilst also not already working in a mortgage-related environment are slim to none.

Qualifications required

There are no qualifications you must have to be a mortgage underwriter. Still, most employers will likely want to see at least the standard mortgage qualification that demonstrates the baseline understanding of the mortgage process, regulation and so on.

The most likely qualification you will see being requested is CeMAP. It is a mandatory requirement for all mortgage advisors but has definite benefits for underwriters also. I have written a short guide on that here.

Beyond that other qualifications are dependant on the type of mortgage underwriting being carried out. For example, when dealing with Equity Release there is a qualification for that, see CeRER. For more specialised lending such as BTL, Commercial Real Estate, Bridging loans or development loans there is also CPSP.

Even if they are not specifically required for a role, they will go some way in demonstrating to employers your commitment to up-front learning. None of these courses will teach you to underwrite specifically, but they will give you a solid understanding of products which is important.