This guide covers the mortgage process after the conditional approval leading to a clear-to-close. The mortgage process after the conditional approval depends on how fast the mortgage processor can gather the list of conditions.
The borrower’s cooperation is needed to get complete docs that are legible with no missing pages.
There are multiple steps in the mortgage process. The mortgage process is a process. It cannot get done overnight. The first and most important stage of the mortgage process is the qualification and pre-approval step.
Mortgage Process After Conditional Approval To Clear-to-Close
The mortgage process from application to clear to close involves several key steps. Keep in mind that the specifics may vary depending on the lender and the type of mortgage, but here is a general overview:
Pre-Application Preparation Mortgage Process
Check your credit score and address any issues that may affect your ability to qualify for a mortgage. Determine how much you can afford to borrow and establish a budget.
Choose a Lender
Research and choose a mortgage lender. Submit a mortgage application, either in person, online, or over the phone. Furnish necessary documents, such as pay stubs, tax returns, bank statements, and proof of assets.
Mortgage Loan Processing
Verification of Information: The lender verifies the information provided in the application. An appraisal is conducted to assess the property’s value. A title search is performed to ensure there are no outstanding liens or ownership issues. An underwriter evaluates the application, creditworthiness, and property appraisal. The underwriter may issue a conditional approval, outlining any additional requirements or conditions.
Conditional Approval and Documentation
Provide Additional Information: Address any additional documentation or conditions required by the underwriter. Once conditions are met, the underwriter issues a final approval. The lender disburses funds to complete the purchase.
Closing Day
Transfer of Ownership: The property officially changes hands. The funds are transferred to complete the purchase.
Post-Closing
The loan is transferred to the loan servicer, and you begin making mortgage payments. The title is transferred to your name officially. It’s important to note that each step requires coordination between various parties, including the borrower, lender, real estate agents, title company, and potentially others. Timely and accurate communication is crucial throughout the process.
Reason For Delays in the Mortgage Process
The number one reason for borrowers getting a last-minute mortgage denial or stress during the mortgage process is due to not being properly qualified by the loan officer. Every loan officer has their own ways of qualifying and pre-approving mortgage borrowers. Some loan officers are more thorough than others
Other loan officers will just issue a pre-approval letter after talking to the borrower even without running credit.
This type of pre-approval letter is a sign of potential disaster waiting to happen. Other reasons for last-minute loan denials and/or stress during the mortgage process is submitting a file to underwriting without the file being complete. This practice can often lead to stress during the mortgage process and no doubt signals delays in getting conditional approval and clear to close.
Steps Leading To Conditional Loan Approval
Conditional loan approval is a stepping stone to a clear to close. A clear to close is the ultimate finish line to a home loan closing. There are instances where borrowers with conditional loan approvals cannot proceed with the mortgage process.
There are instances borrowers cannot proceed with the mortgage process because they cannot provide the conditions of the conditional approval.
The mortgage process after the conditional approval is the most important step in getting to the closing table. The mortgage processor is in charge of making sure all docs are provided by the borrower.
Documents Requested by Mortgage Processor
The processor will gather data and documents such as the following:
- Social Security Card
- Drivers License
- 60 days of bank statements
- Letters of explanations and documentation concerning deposits, withdrawals, overdrafts
- Gather two years of income tax returns, W-2s, and asset information
- Two-years of employment and residential history of borrowers
- Co-borrowers information and documents
- Credit Report, supplements, rapid rescore
An experienced mortgage processor will not submit a mortgage file to underwriting unless the file is perfect and complete.
Processor Roles During Mortgage Process After The Conditional Approval
The mortgage processor’s role is to make sure all documents provided by the loan officer is complete with no missing pages. If the file is incomplete, the mortgage underwriter will kick it back and the file gets delayed
There may be a back and forth process with the mortgage processor. Borrowers may provide information that is not what is asked for.
Borrowers may provide incomplete documents. Every processor’s goal is to have a one-touch conditional loan approval process.. Gustan Cho Associates has a national reputation of closing 100% of our pre-approvals. We will not process and submit a loan to underwriting if we have a 1% doubt.
Closing Disclosure
Receive Closing Disclosure (CD): The lender provides a CD that outlines the final loan terms, closing costs, and other details.
Review the CD carefully to ensure accuracy and clarity. Set a date for the closing meeting.
Conduct a final walkthrough of the property to ensure everything is in order. Sign the mortgage and other necessary documents. Pay any remaining closing costs.
Do All Lenders Have The Same Lending Guidelines
Over 80% of our borrowers are folks who either gotten a last-minute mortgage denial or are stressing with their current lender. Like every other lender, we need to make sure the mortgage process after the conditional approval cannot be taken for granted. The loan officer and mortgage processor will work back to back with the borrower in gathering the conditions from the conditional loan approval.
Clearing Conditions of Conditional Loan Approval
Mortgage process cetween Conditional approval and CTC should not take longer than a few days. Once the conditional loan approval is issued, it is now time to get to work. The mortgage processor will not submit conditions piecemeal.
An experienced processor and loan officer work together in gathering the conditions.
Once all conditions are gathered, the mortgage processor is ready to resubmit the file for a clear-to-close. The loan officer needs to lock the loan prior to submitting the file for a CTC. If everything goes well, the underwriter will review the file and issue the clear to close.
Submitting Final Conditions For a Clear-to-Close
If things are still missing or are incomplete, the file gets re-stipulated and sent back to processing with an updated conditional approval.
The processor and the loan officer need to gather the new conditions of the updated approval and resubmit
It is best recommended that the processor does not submit a file for a clear to close until the file is 100% complete. Mortgage underwriters can issue new conditions that were not listed on prior conditional loan approval. This is not often but it can happen.
Mortgage Process After The Conditional Approval With a Lender With No Overlays
For more information about the contents of this article and/or any other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response.
The mortgage is recorded with the appropriate government office. The lender confirms all requirements are met, and it is ready to close.
Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on government and conventional loans. We are also experts in Non-QM and Alternative Financing Loan Programs. Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.
This ARTICLE on mortgage process after the conditional approval and CTC was UPDATED and PUBLISHED on December 26th, 2023.
