This ARTICLE On Mortgage Process Between Conditional Approval And CTC Was PUBLISHED On September 29th, 2019
There are multiple steps in the mortgage process.
- The first and most important stage of the mortgage process is the qualification and pre-approval step
- The number one reason for borrowers getting a last-minute mortgage denial and/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
In this article, we will cover and discuss the Mortgage Process Between Conditional Approval And CTC.
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 because they cannot provide the conditions
- The Mortgage Process Between Conditional Approval And CTC 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 The 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.
Mortgage Processor’s Role In Preparing File For Underwriting
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
- Or borrowers may provide incomplete documents
Every processor’s goal is to have a one-touch conditional loan approval process.
Alex Carlucci, a senior vice president at Gustan Cho Associates and the top loan officer with Gustan Cho Associates Mortgage Group, says the following about the concerns of his borrowers:
How certain is it that we will pass through underwriting and move to the closing process, once the underwriter reviews what we submitted? My wife and I have been wondering if it’s pretty much a sure thing because we turned in everything that was asked for or if meeting the conditions is just what it takes to get it to the underwriting? Is there still a good chance that we may not get the loan? Also, we have been using our credit card recently and my wife thinks it may hurt our chances of closing our loan. Any truth to this?
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. Over 75% of our borrowers are folks who either gotten a last-minute mortgage denial and/or are stressing with their current lender. However, like every other lender, we need to make sure the mortgage process between conditional approval and CTC cannot be taken for granted.
Alex further states:
The underwriter has completed the initial review of your loan application and issued a conditional approval along with a set of conditions that need to be satisfied before final approval can be issued and you can move to the closing process. You have given all of the information and documents that were requested in order to satisfy these conditions and now the underwriter is reviewing everything. As long as the information provided to the underwriter is complete and does not raise further questions, final approval will be issued. However, more often than not, additional information leads to additional questions. For example, the underwriter requests a bank statement to verify you have enough money to pay for closing costs and the down payment on your new home. You submit a statement verifying that you have $75,000 in the account and on the transaction history there is a large deposit, that equals more than 50% of your monthly gross salary. When the underwriter reviews this they are going to issue a new condition condition asking you to explain and document where that money came from. And your loan will not receive a final approval until the new condition is satisfied. I know that it can be frustrating from a borrower’s perspective when you think you’ve given everything requested and then the underwriter comes back and asks you for additional documentation. But don’t let those requests cause you any stress. The sooner you send the documents, the sooner you’ll have final approval.
The loan officer and mortgage processor will work back to back with the borrower in gathering the conditions from the conditional loan approval.
Submitting Conditions Of The Conditional Loan Approval
Mortgage Process Between 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
- If things are still missing and/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.
Qualifying For Mortgage With A National Direct Lender With No Lender 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 262-716-8151 or text us for faster response. Or email us at email@example.com. We are direct lenders 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 Between Conditional Approval And CTC Was UPDATED And PUBLISHED On August 11th, 2019. Contributing Associate Editors for this blog on Mortgage Process Between Conditional Approval And CTC are the following:
- Alex Carlucci
- Massimo Ressa
- Michael Gracz
- Dale Elenteny
- Martyna Szettel
- Kim Lambert