Steps To Clear-To-Close

Steps To Clear-To-Close and Timeframe of Mortgage Process

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers the steps to clear-to-close and the mortgage process timeline from application to closing. Many mortgage loan borrowers often ask about the timeframe and steps to clear-to-close home loans. Many have heard horror stories about taking over two-plus months on steps to clear-to-close. Timeframe and steps to clear-to-close on home loans should not take more than 30 days from the date borrowers have turned in their e-Disclosures and documents required to process a loan. The biggest question for first-time home buyers is how long the mortgage process takes. The mortgage process should not take longer than 30 days. Gustan Cho Associates have closed countless loans in 2 to 3 weeks.

What are The Steps To Clear-To-Close and How Long Does It Take?

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A clear-to-close is when the mortgage underwriter signs off the mortgage loan application and deems it to prepare the closing docs and that it is ready to fund. A clear-to-close is the finish line before the mortgage process closes. The timeframe and steps to clear-to-close depend on each lender. Most of our borrowers at Gustan Cho Associates close their home loans in 30 days or less. There are cases where it takes longer for a mortgage loan to close. I would need the borrower’s cooperation for a mortgage loan to close in 30 days or less. I will explain how the mortgage process works and what it takes for mortgage companies in Chicago and lenders like myself to close in 30 days or less.

First Time Home Buyers

Whether a borrower is a home buyer buying a home or the homeowner needing a refinance mortgage, the steps to clear-to-close is the same. The pre-approval stage of the mortgage process is the most important step. The first step is the mortgage application. Mortgage Applicants need to complete 1003. 1003 is a four-page mortgage loan application. 1003 can be taken over the phone with a loan officer, or borrowers can complete and submit it online. 1003 is a 4-page secure mortgage application requesting income, debt, and assets. All information stated in 1003 should be as accurate as possible. Information on 1003 is verified with tax returns, W2s, bank statements, credit reports, and other mortgage documents that borrowers provide.

Steps To Clear-To-Close Overview of The Mortgage Process

Once mortgage applicants have completed their online mortgage application, the loan officer pulls credit from the three credit reporting agencies. The middle credit score is used. If there is more than one borrower, then the middle credit score of the lowest credit score borrowers will be used.

Once the loan officer reviews a credit report and verifies the borrower’s information, the next step is for the loan officer to submit the application and credit report to AUS. AUS is the automated underwriting system for official automated approval by Fannie Mae or Freddie Mac.

Gustan Cho Associates has no lender overlays, so the loan should be approved with an AUS approval as long as the borrowers can meet the conditions stated on AUS. Loan Officers should review borrowers’ two years tax returns, two years’ W-2s, and 30 days’ paycheck stubs before issuing pre-approval.

Mortgage Loan Approval Process Leading To CTC

Credit Disputes and other credit tradelines should be carefully reviewed before issuing a pre-approval letter. Down Payment and Closing costs funds should be verified before issuance of a pre-approval letter. With an AUS Automated Approval,  a pre-approval letter should be issued. Pre-approved borrowers can start shopping for a home. All this can be done in less than a day.

Steps To Clear-To-Close:  Week One

Once a home buyer has found a home and entered into a real estate purchase contract, they need to send the executed contract to their loan officer. Once the loan officer receives all docs by borrowers, along with executed real estate purchase contract, e-Disclosures will be sent out along with the Loan Estimate.

Once the loan officer receives a signed mortgage application along with requested documents like two years’ tax returns, two years’ tax returns, recent pay stubs, and recent bank statements, the application is submitted to the opening and processing department and assigned a mortgage processor. The mortgage processor makes sure that all of the information stated on the mortgage application matches the documents sent.

Mortgage Processors will order employment verification, do an IRS verification of tax returns, deposit verification, and rent verification, and ensure borrowers do not have overdrafts. The mortgage loan processor will order the appraisal. A good processor is to make sure the file is as complete as possible for the underwriter. After the loan is processed, it is submitted for underwriting, where a mortgage underwriter is assigned to the file. All of these tasks will be completed by the end of week one.

Steps To Clear-To-Close: Week Two

 The mortgage underwriter will be assigned to the mortgage loan application and will start underwriting the loan. Mortgage Underwriters are the decision-makers on loan approval. Underwriters are the people that issue clear-to-close. Underwriters will review the file with a fine tooth comb and ensure no discrepancies.

Third-party national public records search will ensure borrowers have no public records such as judgments, bankruptcies, foreclosures, or short sales that are not reflected on the credit report. If the appraisal is done, the underwriter will review it.

The underwriter will condition the conditional loan approval if the appraisal is not done. The appraiser should contact the seller’s agent and make an appointment to schedule the physical site appraisal by the end of week two. Once a mortgage underwriter sees the borrower is qualified, conditional loan approval will be issued.

Steps To Clear-To-Close: Week Three

Week three is when we should be getting the appraisal report. The file returns to the mortgage processor after the underwriter issues a conditional loan approval. The processor will clear conditions and re-submit the file for clear-to-close. If everything is cool with the appraisal, the underwriting department is at work again. The mortgage file will be resubmitted for a final review. The mortgage underwriter will issue a clear-to-close if all conditions are met, including the appraisal.

Steps To Clear-To-Close: Week Four

This is when we get clear-to-close, and the mortgage lender prepares all your documents. The processor will contact the insurance agent to ensure the new home is properly insured. The processor and the closing department will set up the time and place of the real estate closing.

Steps To Clear-To-Close: Delays In Mortgage Loan ClosingsSteps To Clear To Close: Delays In Mortgage Loan Closings

The above scenario is a typical 30-day mortgage loan application process, much like all Chicago mortgage companies. Delays often do happen in the mortgage process. Delays on a mortgage loan to close come in when documents are missing, employment verification gets delayed, explanations are missing, or an appraisal is too low. If a borrower is prepared with all required documents and cooperates with the loan officer, a mortgage loan should close in 30 days or less.  Unfortunately, a mortgage loan closing is often delayed due to unforeseen circumstances. For borrowers needing to get qualified for a mortgage or need more information on this topic, please call us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at

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