What is the primary purpose of underwriting in the mortgage process?

The primary purpose of underwriting in the mortgage process is to assess borrower creditworthiness. Underwriting involves evaluating a borrower's financial history, credit score, income, debt-to-income ratio, and other relevant factors to determine the likelihood that they will be able to repay the loan. This assessment helps lenders manage risk and make informed decisions about whether to approve a mortgage application.

While determining property value, finalizing loan documents, and conducting appraisals are important components of the overall mortgage process, they do not directly relate to the primary role of underwriting. Appraisals establish the property’s market value, while loan document finalization occurs after underwriting has determined that the borrower is creditworthy. Thus, the focus of underwriting is squarely on the borrower’s ability to fulfill the financial obligations of the mortgage.