When you own a home, a property underwriter might visit you at some point.
Whether it’s for a mortgage or an insurance company.
Read on to learn more about what they do and why they matter.
What is a property underwriter?
A property underwriter is a professional who decides whether to offer a loan or insurance on houses.
At the end of the visit, the property underwriter usually puts in writing whether they’re willing to offer a mortgage or insurance on the house. This could take a few days or weeks to arrive.
An underwriter may visit you because you’ve requested it. Perhaps you’re asking for a mortgage or insurance.
But it could also happen because someone is buying your house. Or because your current mortgage/insurance term is ending and a new term is being proposed.
Who does a property underwriter work for?
Property underwriters usually work for either mortgage lenders or insurance providers. (Some work for other property companies, such as cash buying companies).
When they visit your house to do an inspection, they’ll represent one of these two organisations.
They could also work for another related financial institution. Credit agencies are a good example.
What does a property underwriter consider when visiting a house?
Condition
The underwriter looks at what condition the house is in. (A property condition report is also relevant to this.)
They will look for major defects that could influence the property’s value. Or which might cause a safety issue. For example:
- Poor electrical wiring
- Bad plumbing
- The building materials used to construct the house.
And more.
Location
Your house’s whereabouts are important to both mortgage and insurance underwriters.
In the former instance, it relates to the value of the property, and how likely it is to keep its value.
In the latter, location is significant when you’re close to rivers (flooding) or on top of a hill (lightning).
Borrower’s financial situation
The underwriter represents a company entering into a financial relationship with you.
So, they’re not just keen to know about your property: they also want to know about you.
Your financial situation will be looked at. This usually includes:
- Your credit score
- Income
- History of making payments
- Number of dependents.
And more.
Other factors contributing to risk involved
There are other details which influence the risk involved, including:
- Your neighbours’ homes conditions
- Ongoing legal disputes related to your property
- Comparable sales nearby
- Any hazardous materials on the site.
And more.
How long does property underwriting take?
The visit from a property underwriter doesn’t take more than a few hours.
It could then be a few days or weeks before you hear from them.
Is property underwriting the same as mortgage underwriting?
Not usually, although some people use these terms interchangeably.
Property underwriting is when an insurance provider visits your house to decide whether to offer insurance on it.
Mortgage underwriting is done by a lender, to see if they should give you a mortgage, and how much for.
Can I stop a property underwriter from visiting me?
Most mortgage lenders and insurance providers make a visit from an underwriter compulsory. If you say no, they can refuse to work with you.
You may then need to search for someone who will offer without underwriting first, which is very rare.
