What triggers a file to get flagged for manual underwriting?

What triggers manual underwriting?

You want to know what causes a mortgage file to get flagged for manual underwriting instead of automated approval. Several factors can trigger this review process.

Manual underwriting happens when the automated underwriting system can't approve a loan based on standard guidelines. Common triggers include credit scores below certain thresholds (typically around 620), high debt-to-income ratios, recent credit events like bankruptcies or foreclosures, or employment gaps. Self-employed borrowers often get flagged because their income documentation differs from W-2 employees. Large deposits in bank accounts, multiple recent credit inquiries, or unusual asset sources can also prompt manual review.

Property-related factors matter too. Non-standard property types, recent sales of comparable homes that affect the appraisal, or properties in declining markets may require human review. Credit report discrepancies, like addresses that don't match your application or accounts you don't recognize, commonly trigger manual underwriting.

If your file gets flagged, the lender will request additional documentation to verify income, assets, and creditworthiness. Manual underwriting takes longer than automated approval but doesn't mean denial. Share your complete financial picture with the lender and they can walk you through what documentation helps support your application.