How to Become a Bank Underwriter
Your fate in getting approved for a personal, home or auto bank loan lies in the hands of a Bank Underwriter. Bank Underwriters will determine whether a person has the capacity to pay off the type of loan they are applying for by using several pieces of information about a person's financial history and activity. Applicants looking for a bank loan will fill out an application with their personal financial and job history information. That application gets sent to a Bank Underwriter who will use the entire client's history in order to grant or decline the bank loan.
People who want to become a Bank Underwriter must have strong analytical skills and attention to detail in order to be able to make decisions regarding a client based on their financial history. Bank Underwriters must also be reliable and dependable because they work with an applicant's sensitive information such as social security numbers and date of births which can be used negatively in cases such as identity theft.
Bank Underwriters are an important part of a banking institution because their work attempts to prevent any monetary losses to the lending company. They do so by evaluating a potential client's credit risk and basing decisions on it.
Education Requirements to Become a Bank Underwriter
Candidates who want to become a Bank Underwriter must have a combination of continued education, and training in lending compliance as well as knowledge or credit laws in order to find a job in this field. Crediting laws Bank Underwriters need thorough knowledge of include: Patriot Act, Equal Credit Opportunity Act, and the Fair Credit Reporting Act.
Companies seek individuals who have a minimum of a Bachelor's Degree preferably in Finance, Banking, Accounting, Investment or Economics. Additionally, candidates who seek more education, such as an MBA will have more job opportunities and possibility of growth in the field.
Some skills that a Bank Underwriter needs include: having great communication skills, expertise with financial and balance spreadsheets, ability to understand and analyze personal and business tax returns, familiarity with credit reports and appraisals.
Bank Underwriter Job Description
Candidates who want to become a Bank Underwriter must know how to make decisions based on a potential client's financial history. They must look at an applicant's credit score, employment information, how long a client has been at their job, income, other debt information. They also look at whether the client has any collateral such as a home or auto to cover the amount of the loan in case of a default.
Bank Underwriters use computer systems to help them determine an applicant's credit worthiness. The computer software gives the underwriter a financial score that predicts whether the loan applicant has the means to pay the loan off on time. They must usually adhere to the results presented by the computer system.
The underwriter bases their decision off that score but also has the means to override it, depending on the financial institution they work for. If an underwriter is able to override a system decision, they are accepting accountability in case the client defaults on the loan.
The types of loans Bank Underwriters grant or decline include:
- Home Equity loans
- Small Business Loans
- Debt consolidation
- Credit Cards
Bank Underwriters must use their cautious expertise in order to approve and accept any bank loans under their responsibility. Analyzing a client's credit risk is important in order to protect their employer financially and prevent any losses.
Bank Underwriter Salary and Career Path
The majority of Bank Underwriters work for financial institutions such as commercial banks, credit unions or saving institutions. The job outlook for this industry is expected to grow about 10% throughout the next decade which is considered average.
Some sectors in the industry will hire less people due to the advancement of underwriting software that has made it easier to sort through applications quicker. In addition, the availability of loan applications online will make it easier for clients to bypass loan brokers and officers. This will ultimately affect the industry in the near future. However, mortgage and consumer loan officers can expect more job opportunities within the industry.
According to BLS.gov, the national median wage for all loan officers is approximately $55,000 per year. Bank Underwriters who are employed by a Federal Executive Branch earn the highest wages at approximately $69,000 annually.
*Salary Information provided by the Bureau Of Labor Statistics