Conditional Mortgage Approval: Mortgage Conditions

After your mortgage application has been processed and underwritten, the mortgage underwriter will issue a conditional mortgage approval.  A conditional mortgage approval is a letter of intent that the mortgage lender will issue a formal mortgage approval and a clear to close as long as the mortgage conditions can be met by the mortgage loan borrower.  Many times, the process up to the conditional mortgage loan approval is easy.  It is satisfying the mortgage conditions that can be stressful and this is the period where it can drive both the mortgage loan borrower, the mortgage processor, and the mortgage loan originator crazy.  Mortgage conditions are issued by the mortgage loan underwriter and most mortgage conditions are reasonable and expected.  The key to having as little mortgage conditions as possible is to make sure that the mortgage loan processor submits a complete mortgage application package to the mortgage loan underwriter.  Many times, the mortgage loan processor might just skip certain items because they have not gotten documents back from the mortgage loan borrower.  Any mortgage items that have not been submitted will come back as mortgage conditions and this could lead into delays in closing your mortgage loan.

Mortgage Conditions Is What Causes Delays In CTC

The main cause for delays in getting a mortgage clear to close is due to mortgage conditions.  The key to meeting the closing date deadline by getting a quick clear to close is to make sure that the mortgage loan application has been processed as complete as possible.  The mortgage loan borrower should get the necessary documents such as two years tax returns, two year’s W-2s, most recent paycheck stubs, two months bank statements, letters of explanations for credit inquiries, bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, 401k statements, investment accounts, divorce decree, letters of explanations for derogatory accounts, and any other documents requested by the mortgage loan originator.  Any missing documents that are not submitted with the initial mortgage documents will be conditioned on the initial conditional mortgage loan approval.

Conditional Mortgage Loan Approval

Once you get a conditional mortgage loan approval, there will be a list of mortgage conditions requested by the mortgage loan underwriter.  All mortgage conditions needs to be met and submitted to the mortgage loan underwriter in order for the mortgage loan underwriter to issue a clear to close.  It is the mortgage processor’s job to get the necessary conditions either by requesting it directly from the mortgage loan borrower or requesting through the mortgage loan originator.  It is not uncommon to have a line item of over 20 mortgage conditions.  The key is to get all the conditions at once and re-submit them to the mortgage loan underwriter.  Once the mortgage conditions listed on the conditional mortgage loan approval is satisfied and submitted to the mortgage loan underwriter, it normally takes 24 to 48 hours for the underwriter to either issue a clear to close on the mortgage loan or get you an updated conditional mortgage loan approval which means that the underwriter did not get all of the mortgage conditions or that the mortgage loan underwriter issued a fresh batch of conditions.  Again, if all of the requested mortgage conditions were not submitted, the mortgage loan underwriter will not sign off on a clear to close and this will cause a delay in getting a clear to close.  Some mortgage underwriters will not get back to you for 48 to 72 hours after you submit mortgage conditions so everytime you submit conditions and it is missing items, you are looking at delays.  Many veteran experience mortgage loan processors will not submit conditions even if they are missing just one minor items due to the delay factor.

Gustan Cho

www.gustancho.com

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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