M Pragma Mortgage
Loan File · In Underwriting

One file. Seven stages. One decision.

Every mortgage application moves through the same underwriting spine — intake, credit, capacity, collateral, capital, automated findings, and clear to close. Follow a file through each stage the way an underwriter actually reads it.

Walk the file → Avg. file cycle: 18–32 days
4
Core risk pillars — the C's
7
Underwriting stages
43%
Typical back-end DTI ceiling
Mortgage Journey

How a file earns "Clear to Close."

Scroll through the stages in order — this is the path a purchase file takes from a submitted 1003 to a funded loan. Each stage carries its own evidence: what's collected, what's tested, and what can stop the file cold.

STAGE 01Day 0–2 · Intake

Application Intake

The file opens with the Uniform Residential Loan Application (Form 1003). Before anything is judged, it has to be complete — every gap here becomes a stipulation later.

  • 1003 reviewed for completeness and consistency
  • Borrower identity and SSN verified
  • Purchase contract or refinance terms logged
  • Initial disclosures issued, intent to proceed confirmed
Status: File opened, pending documentation
RECEIVED
Loan file#UW-1003
Loan purposePurchase
Property typeSingle-family
OccupancyPrimary residence
Docs outstanding6 items
STAGE 02Day 2–4 · Credit

Credit Review — will they repay?

A tri-merge credit report is pulled and the representative score is set — typically the middle of three bureau scores, or the lower middle for co-borrowers. Derogatory events trigger seasoning requirements before the file can proceed.

  • Tri-merge report pulled; representative score selected
  • Payment history and derogatory events reviewed
  • Bankruptcy, foreclosure, or short-sale seasoning checked
  • Recent inquiries screened for undisclosed debt
Status: Representative score supports program eligibility
VERIFIED
Credit summaryTri-merge
Representative score742
Derogatory marksNone active
Revolving utilization24%
Inquiries, last 6 mo.1
STAGE 03Day 3–7 · Capacity

Capacity — can they repay?

Income is verified against two years of history and tested for continuance. Debt-to-income is calculated both ways: housing payment alone (front-end), and total obligations (back-end).

  • Income verified: paystubs, W-2s, or two years of returns if self-employed
  • Employment history confirmed via VOE, gaps explained
  • Front-end and back-end DTI calculated
  • Variable income (bonus, commission, self-employment) tested for stability
Status: Back-end DTI within program ceiling
CALCULATED
Income & DTIWorksheet
Gross monthly income$11,200
Front-end DTI24%
Back-end DTI36%
Employment history2 yrs, continuous
STAGE 04Day 5–12 · Collateral

Collateral — is the property adequate security?

An independent appraisal establishes market value; title work confirms clean, transferable ownership. Loan-to-value drives both eligibility and pricing, including whether mortgage insurance is required.

  • Appraisal ordered and reviewed against contract price
  • Loan-to-value and combined LTV calculated
  • Title search reviewed for liens or ownership disputes
  • Condo or PUD project approval checked, if applicable
Status: Appraised value supports loan amount
APPRAISED
CollateralAppraisal report
Contract price$620,000
Appraised value$625,000
Loan-to-value80%
TitleClear, no liens
STAGE 05Day 6–12 · Capital

Capital — where did the money come from?

Down payment and closing funds are traced to their source. Undisclosed loans and unexplained large deposits are the most common reason a clean file stalls here.

  • Two months of bank statements reviewed for large deposits
  • Down payment source verified as sourced and seasoned
  • Gift funds documented with a signed gift letter, if used
  • Post-closing reserves confirmed against program minimum
Status: One deposit flagged — source letter requested
FLAGGED
Assets2-mo. statements
Down payment$124,000
Reserves post-closing4.5 months
Large deposit, unexplained$8,400
Condition issuedLetter of explanation
STAGE 06Day 10–18 · AUS

AUS Findings & Conditions

The file runs through the automated underwriting system — Desktop Underwriter or Loan Product Advisor — and comes back with an initial recommendation and a list of conditions the underwriter must clear manually.

  • AUS findings reviewed: Approve/Eligible or Refer/Caution
  • Manual underwriter validates automated findings against the file
  • Prior-to-close conditions issued and tracked
  • Compliance checked: ATR/QM, TRID timing
Status: Approve/Eligible, 3 conditions outstanding
APPROVE / ELIGIBLE
AUS findingsDesktop Underwriter
RecommendationApprove/Eligible
Conditions outstanding3
QM statusSafe harbor
Re-disclosure neededNo
STAGE 07Day 15–25 · Closing

Clear to Close

Every condition is satisfied, credit and employment are re-verified just before signing, and the Closing Disclosure goes out on its required timeline. The file's decision is final.

  • All prior-to-close conditions cleared and re-reviewed
  • Verbal re-verification of employment, no new debt on credit
  • Closing Disclosure issued within the required window
  • Final "Clear to Close" issued to escrow
Status: Clear to Close
CLEAR TO CLOSE
Final decisionUnderwriter of record
Conditions remaining0
Final DTI (back-end)36%
Final LTV80%
DecisionClear to Close
Underneath every stage

The four questions that never change.

Regardless of loan program or AUS engine, every stage above is really testing one of four things about the file. This is the grid an underwriter is checking against, start to finish.

C

Capacity

Ability to repay — income, employment stability, and debt-to-income against the proposed payment.

C

Credit

Willingness to repay — payment history, derogatory events, and how the borrower has handled debt before.

C

Collateral

The property as security — appraised value, loan-to-value, and clean, transferable title.

C

Capital

Funds behind the deal — sourced down payment, seasoned assets, and reserves after closing.

Every file tells this story, in order.

The stages don't change — what changes is how much friction there is between them. That's the gap most underwriting tooling is built to close.

Review the journey again ↑