Steps Leading To Clear To Close
This Article On The Steps Leading To Clear To Close Was Written By Gustan Cho
Steps in the Mortgage Process: Underwriting – Clear to Close
By Gustan Cho
There are certain steps leading to clear to close. The mortgage process starts with the pre-approval process where the mortgage borrower gets qualified by a loan officer to make sure that they have the minimum credit score requirements and meet the debt to income ratio requirements on the particular mortgage loan program they are applying for. Here are the steps leading to clear to close in the mortgage process:
- The borrower then gets a pre-approval letter by the mortgage loan originator and goes shopping for a home.
- Once the home buyer decides on a particular home that he or she wants to purchase, they enter into a real estate purchase contract.
- Once the buyers and sellers sign the real estate purchase contract, the executed real estate purchase contract is then submitted to the mortgage loan officer and that is when the mortgage process begins.
- The mortgage loan officer will gather all necessary docs such as two years tax returns, two years W2s, most recent paycheck stubs, two months bank statements, asset accounts such as 401k accounts and investment accounts, pertinent documents that may apply to the borrower such as bankruptcy paperwork, foreclosure paperwork, short sale paperwork, divorce decree, child support paperwork, alimony paperwork, and other necessary paperwork.
- Once all of the documents are collected, the mortgage loan officer will submit the whole package to the mortgage processing department and a mortgage processor will be assigned to the file.
- The mortgage processor will make sure that there are no missing items and make sure that all paperwork is updated such as having the most recent paycheck stubs and bank statements.
- The mortgage processor will then submit the file to the mortgage company’s underwriting department where a mortgage underwriter will be assigned to the mortgage file.
- The mortgage underwriter will go over the file and make sure that the file is complete and meets all of the mortgage lending guidelines and will thoroughly review the borrowers credit, credit scores, credit history, income docs, asset information, and letters of explanations.
- Once the mortgage underwriter feels comfortable with the mortgage applicant and sees that the borrower meets all mortgage guidelines, he or she will then issue a conditional mortgage loan approval .
- The mortgage file then goes back to the mortgage processor where it is the mortgage processor’s job to gather all the conditions that is requested by the mortgage underwriter. The mortgage loan originator is notified of the conditions and the mortgage processor with the help of the mortgage loan officer work together in getting the conditions.
- Once the borrower submits all the conditions, the mortgage processor will submit the mortgage file back to the mortgage loan underwriter for a clear to close .
- A clear to close is great news because it means that the mortgage lender is ready to fund the mortgage loan and send the closing paperwork to the title company.
The Clear To Close On The Steps Leading To Clear To Close
By this stage in the mortgage process, you are breathing a sigh of relief as you are in the final stages of the mortgage process. Congratulations, you have made it through the hard part! Once you got the clear to close, the following steps are taken:
- For borrowers and Loan Officers, receiving the Clear to Close is like music to your ears!
- Once you receiving the Clear to Close, your mortgage lender, realtor, and closing agent will work together to schedule a closing date.
- Your lender will work to prepare all the required documents required to be signed at closing.
- After receiving your Clear to Close (CTC), there will be a series of quality control checks that take place.
- Do not be alarmed if the QC process asks additional questions, this is part of the process of ensuring that all the proverbial I’s are dotted and T’s are crossed, it is a formality to protect the lender.
- Three days prior to closing, you will receive a series of disclosures which will outline all of your loan details and state your required cash to close.
- Upon receiving these disclosures, it is important that you immediately acknowledge them as there are timing requirements for closing.
- Prior to closing, you will prepare a Certified Check to cover your cash to close amount.
- You will also be given instructions on what you need to bring with you to closing, which will likely be your certified check, driver’s license or state issued identification, and your social security card.
Congratulations on making it to this stage, you are within a few days of home ownership!
About The Author
This article on Steps Leading To Clear To Close was written by Gustan Cho. Gustan Cho is Editor In Chief for Gustan Cho Associates Mortgage and Real Estate Informational Center and a licensed mortgage loan originator for a Fannie Mae, Freddie Mac, Ginnie Direct national mortgage banking company. Gustan Cho and The Gustan Cho Team specialize in FHA Loans, VA Loans, USDA Loans, Non-QM Loans, Reverse Mortgages, FHA Rehab Loans, Reverse Mortgages, Conventional Loans, Jumbo Mortgages, and alternative financing. Since The Gustan Cho Team represents a direct lender, there is no overlays and as long as the automated finding per Automated Underwriting System renders an approve/eligible, you are set to go because there are no FHA Lender Overlays . Over 70% of Gustan Cho Associates borrowers are folks who either got denied by another mortgage lender at the last minute due to one reason or another or due to their mortgage lender overlays. A large percentage of Gustan Cho Associates borrowers have credit scores under 600 FICO where many FHA lenders require higher credit scores due to their lender overlays. FHA , VA, USDA, Fannie, Freddie does not require FHA borrowers to pay off outstanding collection accounts to qualify for these mortgages and high balance collection accounts and charge off accounts do not have to be paid off with a zero balance to qualify for a FHA Loan. If you are in need of a FHA mortgage lender with no lender overlays, contact Gustan Cho or email us at email@example.com. We are available 7 days a week, evenings, weekends, and holidays.