What Are The Steps In Mortgage Process Leading To Clear To Close

This BLOG On What Are The Steps In Mortgage Process Leading To Clear To Close Was UPDATED On July 22, 2017

The Basic Steps In Mortgage Process Leading To Clear To Close is the following:

  • Borrower completes a 4 page online mortgage application at www.gustancho.com by clicking on the Apply Now icon on the top right of this website.
  • Loan Officer will get alert once the mortgage applicant completes and submits mortgage loan application.
  • Loan Officer will review the online mortgage application and contact borrower to go over the mortgage application and make sure everything is correct.
  • Loan Officer will pull a credit report on the mortgage loan borrower.
  • Mortgage Loan Officer will submit the completed mortgage application along with the credit report to the automated underwriting system ( AUS ) for results. 
  • Seeking an Approved Eligible per AUS Findings..
  • Mortgage Loan Officer will issue a pre-approval.
  • Armed with a solid pre-approval, mortgage borrower can now shop for home.
  • Borrower hires a real estate agent and looks for home. 
  • Home Buyers chooses and will submit real estate purchase contract to mortgage loan officer and the mortgage process is ready to start.

Processing Stage Of Mortgage Process Leading To Clear To Close

Once the home buyer submits the executed real estate purchase contract, the mortgage process starts.

  • Mortgage loan officer will request mortgage documents.
  • Examples of mortgage documents required are two years tax returns, pay check stubs, 2 years W-2s, 60 days bank statements, bankruptcy papers if applicable, divorce decree if applicable, investment and retirement accounts, and other necessary paperwork.
  • The file is assigned to a mortgage processor.
  • Mortgage package is reviewed by an assigned mortgage processor and prepared for underwriting.
  • Mortgage package needs to be complete as possible to avoid delays.
  • Mortgage processor role is to make sure all documents is complete.

Underwriting Stage Of Mortgage Process Leading To Clear To Close

The mortgage underwriter is the person who approves or denies a mortgage loan applicant and issues a clear to close.

  • Underwriter reviews and scrutinizes mortgage loan package and makes sure borrowers and property meet mortgage guidelines and lender overlays.
  • Underwriter’s job is make sure that everything is in order and cross checks the information listed on the mortgage application with the documents provided.
  • Appraisal is ordered as well as other necessary inspection.
  • Conditional approval is issued.
  • Once conditions from conditional loan approval is provided to underwriter from mortgage loan processor, the file is reviewed for a clear to close.

Conditional Approval

Conditional Loan Approval is issued by underwriter after the underwriter feels confident that the borrower meets all mortgage guidelines and lender overlays. Borrower needs to provide all conditions requested in order for the underwriter to issue a clear to close.

  • The mortgage loan is approved contingent that all of the conditions issued by the underwriter can be met. 
  • Such conditions include letters of explanations on credit inquiries, bankruptcies, foreclosure, additional documentation, job gaps, address gaps, and reasons for prior bad credit.
  • Once all conditions are submitted, it is reviewed by the underwriter and if sufficient, it gets assigned to a senior underwriter. 
  • Underwriting Manager double checks everything.
  • Once satisfied, mortgage underwriter will issue a clear to close.

Final Step Of Mortgage Process: CTC

  • A clear to close is issued when the mortgage lender is ready to fund. 
  • The underwriting department coordinates it with the title company and prepares the Closing Disclosure.
  • The CD is the replacement of the HUD.
  • Cash To Close, Itemization on costs, fees, and breakdowns of the funding is all stated on the Closing Disclosure.
  • A closing date is set and the transaction closes. 
  • Ownership transfers hands.
  • The purchaser of the home is now the official homeowner and the seller gets paid and keys are exchanged.

Related> What Is The Timeline For A Clear To Close

Related> Clearing Conditions For A Clear To Close

Related> Timeline From Pre-Approval To Clear To Close

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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