What Are Mortgage Conditions?
Once your mortgage loan has been processed, it will get submitted to the mortgage company’s underwriting department and assigned to a mortgage loan underwriter. A mortgage loan underwriter will carefully look at your mortgage loan application and all of your mortgage loan documents that you have submitted such as two years tax returns, two year’s W-2s, 30 days pay check stubs, 60 days of bank statements, credit report, and other documents that apply to you such as bankruptcy paperwork, foreclosure paperwork, short sale paperwork, divorce decree, pension agreements, child support paperwork, etc. Once a mortgage loan underwriter has reviewed your mortgage loan application and has gone through all of the documents provided and feels comfortable that you qualify and meet all mortgage lending standings, the mortgage loan underwriter will issue a conditional mortgage loan approval. Most mortgage loan borrowers feel that they are totally approved once they get a conditional mortgage loan approval. This is true but the key word here is conditions.
What Is Conditional Mortgage Loan Approval?
A conditional mortgage loan approval is when the mortgage loan underwriter feels comfortable to issue a mortgage approval and will issue a clear to close and fund the loan as long as the mortgage conditions can be provided. Mortgage conditions can be updated bank statements, updated paycheck stubs, letters of explanation for derogatory credit, appraisal, and other documents that the mortgage loan underwriter needs in order for them to issue a clear to close. A clear to close is when the mortgage lender is ready to fund the mortgage loan.
Submitting Mortgage Conditions
The mortgage loan processor will request all of the mortgage conditions requested by the mortgage loan underwriter to the mortgage loan applicant. Mortgage conditions can vary from anywhere to a few items to dozens of items. When you get mortgage conditions, you need to provide everything and a mortgage loan processor will not submit it until she has every single mortgage condition. If the mortgage processor submits incomplete mortgage conditions, the file will get re-conditioned for the missing items and this is when delays occur and closing dates gets delayed. Once the mortgage processor has accumulated all the mortgage conditions from the mortgage loan applicant, she will submit it to the mortgage loan underwriter for a clear to close.
Additional Conditions After Submitting Mortgage Conditions
There are many times where a mortgage loan underwriter will request additional conditions not requested on the initial conditional mortgage loan approval and this is when many mortgage loan applicants, mortgage processors, and mortgage loan originators get extremely frustrated. A seasoned experienced competent mortgage loan underwriter should not request additional conditions after she issues an initial condition list unless the mortgage conditions requested are incomplete or not the condition initially requested. Most experienced mortgage loan processors will not submit incomplete conditions. It normally takes 24 to 72 hours for a mortgage loan underwriter to review mortgage conditions so submitting incomplete mortgage conditions can cause delays in the mortgage application process and possibly delays in mortgage closing dates. If additional conditions are requested, you have no other choice but to comply with the additional conditions request.
Clear To Close
Once the mortgage loan underwriter has reviewed all mortgage conditions, she will issue a clear to close. Once a clear to close has been issued, the mortgage docs are prepared by the mortgage lender and sent to the title company and the wire is sent to fund the mortgage loan.
What Is QC?
QC, or Quality Control, is another mortgage underwriting process after a clear to close has been issued by the original mortgage loan underwriter. A QC underwriter is assigned to overlook the work of the initial mortgage loan underwrite. Quality Control is not implemented by all mortgage companies and only a certain percentage of mortgage companies have a QC process. A QC underwriter can come up with more conditions from the mortgage loan applicant. Most QC process takes 24 hours to 48 hours to complete, however, it can take much longer. If you are applying for a mortgage loan, find out if the mortgage company your file is being submitted to has a QC process. If they do, see if you can get another mortgage lender that do not have a QC underwriting process. I have had extremely bad experience where a whole mortgage file got delayed after the initial clear to close by a mortgage loan underwriter do to QC underwriting. Why have a mortgage loan underwriter issue a clear to close if it needs to be re-underwritten.