What Is A Conditional Mortgage Approval: Approval?
There is several stages in the mortgage approval process. The ultimate goal is to get a clear to close. A clear to close is that the mortgage loan has been totally approved and the mortgage lender is ready to fund the loan. Once the mortgage lender issues a clear to close, the next step is to have the mortgage documents prepared and sent out to the title company along with the wire. A conditional mortgage approval is somewhat of a promissory note that the mortgage lender will issue a clear to close as long as the mortgage loan borrower can clear all the conditions the mortgage underwriter is requesting. A conditional mortgage approval is by no means a guarantee mortgage approval. It is only a guarantee mortgage approval as long as the conditions requested by the mortgage loan underwriter can be satisfied. In the event if the conditons cannot be provided and signed off, the conditional approval is null and void.
Examples Of Conditions Requested By Underwriter
When a mortgage underwriter issues a conditional mortgage approval, some of the conditions may be the following:
1. Updated bank statements and paycheck stubs.
2. Verification of Employment and Verification of Rent.
3. Appraisal review and termite inspection report.
4. Letters of explanations concerning credit inquiries, bankruptcy, short sale, deed in lieu of foreclosure, short sale, employment gaps, recent late payments, compensating factors, discrepancies on credit report, credit supplement, divorce decree, extenuating circumstances, insurance, flood insurance, overdrafts, and discrepancies or additional questions from the mortgage underwriter.
5. Proof of funds for down payment and closing costs.
6. Irregular deposits and letters of explanations on deposits over $200.
Providing Underwriter’s Conditions
Once the conditions from the mortgage loan underwriter has been met, a senior underwriter will review the final conditions. Additional conditions can be issued. Once the conditions have been met, some mortgage lenders will have a Quality Control underwriter, QC, go over the file to make sure everything the underwriter has not made any mistakes. During the QC underwriting process, a soft credit pull can be processed to make sure that the mortgage borrower’s debt to income ratios are in check and no surprises has surfaced. The QC process normally takes no longer than 24 to 48 hours. Once QC is satisfied, a clear to close is issue and the mortgage loan is ready to fund.