Bank Underwriter: Job Duties, Occupational Outlook, and Education Requirements
Explore the career requirements for a bank underwriter. Get the facts about education, certification options and employment outlook to determine if this is the right career for you.
What is a Bank Underwriter?
Bank underwriters use financial data, credit reports and records research to decide if loan applications should be approved. This involves meeting with applicants to gather information and answer questions. These question often regard the different types of loans available, payment options and terms. Bank underwriters are also responsible for insuring that loan agreements meet state and federal regulations. The following chart provides an overview of what you need to know about entering this field.
<table border="1"><tr><td> <b>Degree Required</b> </td><td> Bachelor's degree</td></tr>
<tr><td> <b>Education Field of Study</b> </td><td> Finance, business</td></tr>
<tr><td> <b>Key Responsibilities</b> </td><td> Verify loan applicant information and evaluate applicant's ability to repay</td></tr>
<tr><td> <b>Licensure/Certification</b> </td><td> Licensure is required to process loans; certification is optional</td></tr>
<tr><td> <b>Job Growth (2020-2030)</b> </td><td> 1% <i>(for all loan officers)</i>*</td></tr>
<tr><td> <b>Median Salary (2020)</b> </td><td> $63,960 <i>(for all loan officers)</i>*</td></tr>
</table><p><i>Source: *U.S. Bureau of Labor Statistics</i>
</p><h3 id="section---WhatAreMyJobDutiesAsABankUnderwriter">What Are My Job Duties as a Bank Underwriter?</h3><p>Individuals apply for loans to purchase houses, cars, equipment or other merchandise. Company owners seek loans for expansion, renovation, relocation, new inventory or equipment upgrades. As a bank underwriter, you're a specialized loan officer who investigates a loan applicant's reported financial information. Your main duties are to verify that all information provided is accurate and up-to-date, and that the applicant has the financial ability to repay the loan in full.
</p><p>It will also be your responsibility to consider if the loan amount requested is suitable for the applicant's financial situation and if there are other loan options that may be more appropriate. You may also help design the terms of mergers and acquisition as well as suggest whether applicants should seek debt management counseling.
</p><p>When working with applicants who are denied traditional loans, you may need to explain the reasons for the denial, including any restrictions imposed by lender. You'll learn how to use underwriting software to retrieve an applicant's credit history. For more complex loans, you may have to review financial statements and determine what collateral is needed or allowed. You may also be expected to solicit commercial loans from prospective companies.
</p><h3 id="section---WhatIsTheOccupationalOutlook">What Is the Occupational Outlook?</h3><p>According to the U.S. Bureau of Labor Statistics (BLS), employment of bank underwriters was expected to grow by one percent between 2020 and 2030, which is little to no change than the average for all occupations (<i>www.bls.gov</i>). This due to bank branches declining and technology that enhances the productivity of loan processing. Your top paying employers are automobile dealers; other motor vehicle dealers; and securities, commodity contracts, and other financial investments and related activities. The BLS also reported that loan officers, who include bank underwriters, earned a median yearly salary of $63,960 in May 2020.
</p><h3 id="section---WhatEducationRequirementsAreNeeded">What Education Requirements Are Needed?</h3><p>Some underwriting positions require only a high school diploma and on-the-job training, but a college degree is often required if you want to work on commercial loans. You can improve your career opportunities with a bachelor's degree in finance, economics or accounting. Your coursework should include classes in macroeconomics, microeconomics, risk management, game theory, accounting systems and statistics. Employers also may prefer that you possess sales experience and knowledge of computers and software.
</p><h3 id="section---SeekCertification">Seek Certification</h3><p>For continued education and to enhance your career advancement opportunities, you may seek certification programs such as the loan review certificate program offered by the Bank Administration Institute (<i>www.bai.org</i>). If you work with mortgage loans, then you may need to meet licensing requirements. You may also pursue the certified mortgage banker designation through the Mortgage Bankers Association. This certification requires three years of professional experience, passage of an exam and continuing education credits.
</p><h3 id="section---WhatAreSomeRelatedAlternativeCareers">What Are Some Related Alternative Careers?</h3><p>A few careers that are closely related to bank underwriting include financial analyst, financial examiners, financial managers and personal financial advisers. Financial analyst assess the performance of stocks, bonds and other investments, then use that knowledge to provide guidance to businesses and individuals making investment decisions. Financial examiners evaluate balance sheets, risk levels of loans and bank management to ensure compliance with state and federal laws. Financial managers produce financial reports, direct investment activities and develop strategies for investors. Personal financial advisers give individuals advice on investments, retirement founds, college founds and other financial decisions.</p>