Table of Content
A clear to-close can also refer to meeting the requirements and conditions of a mortgage transaction. At this point, your lender has thoroughly reviewed your documents and performed some verification. This will demonstrate that you meet the expectation of the loan amount requested by the borrower.
The time that it takes to resolve the difference in the worth of the property can delay the closing timeline. Dedicate a good amount of your time to gathering essential documents that’ll be needed for processing your mortgage. Keep them on standby and be ready to present them to your mortgage lender for verification.
How Long Does It Take to Close On A House?
Once everything is cleared to close and all the loan documents are ready, you’ll be doing a lot of signing and getting things notarized. You’ll receive a final Closing Disclosure detailing all of your loan terms, costs, and other details from the lenders for your review. “Clear to close” in terms of a buying a home means that a mortgage underwriter has approved your loan and all conditions for approval have been met. Your lender is also ready to move forward with a closing date with the title company, so you’re more than approved.
When they finally do, it's often late in the process, which can put borrowers in real jeopardy. Between receiving the closing disclosure and the closing date, it’s best to play it safe. That means you should postpone taking lines of credit for furniture and other items or services until after closing. You will need to provide copies of your tax returns from the previous two years. You will also need to provide a copy of your pay stub for the previous two months.
Changes to your creditworthiness
Unfortunately, some borrowers make the mistake of thinking clear to close means the deal is done. It’s true, loans are rarely denied after clear to close – but it’s possible. Your lender may verify your employment status and credit one last time before closing. If any red flags pop up, it may cause the lender to delay closing until the issue is resolved.
Once you receive the clear to close, you can expect to close within a week. In that week the bank will verify your employment and run your credit once more and provide you with the closing disclosure. After signing the closing disclosure, you need to wait 3 days before the closing, during which you will perform a final walk-through and prepare the necessary checks for closing day. The lender will request documents, including up-to-date bank statements, tax returns, pay stubs and a copy of your signed purchase agreement. Make sure to have your paperwork ready if you receive any gifts or down payment assistance.
Additional Inspection
You’ll be given a file of legal documents to sign on the scheduled closing date in order to conclude and make every agreement bonding. If you don’t hurry the closing process, the mortgage rate lock may expire and you may need to renew it or face the risk of having your interest rate go up. A mortgage rate lock is a feature in real estate that keeps your interest rate from rising while you run through the process of closing on your loan. However, you’ll pass through a three day waiting period before you can sign.
Typically they will simply conduct a final verbal verification of employment before funding the loan. A mortgage commitment letter verifies that you’ve satisfied the underwriting process for the mortgage, and the lender is committed to providing the funds. But there may be other conditions you’ll need to satisfy before you’re declared clear to close.
As long as there aren’t any drastic changes to your financial situation before you close, your lender should hold up their end of the deal. Lenders need to see stability in your employment, income and spending habits before you can be cleared to close. “The part that takes the longest is the appraisal,” said senior mortgage planner Ashley McKenzie-Sharpe of Fairway Independent Mortgage Corp.
On the other hand, a home examination or inspection assists buyers in identifying issues with a home before purchasing it. Work with us so you can reach clear to close status on time and move into your new property. With all the inspections and paperwork in order, the underwriter can review your loan and share any outstanding conditions that need to be met to clear to close. Once these addendums have been wrapped up, your loan will be approved and you are able to close. As the buyer, you are responsible for paying for the inspection and appraisal. You don’t need to disclose the results of the appraisal with the seller, and you have the potential to walk away from a sale if the value of the home comes in too low.
Once the offer has been accepted, your real estate agent will draw up a purchase agreement. The very first step that must take place before a loan officer can submit your application for processing is that the seller must accept your offer. Clear to close means you’re close to the finish line and will soon be moving into your new house! This phrase means that the underwriter has finished reviewing your documents and has approved your loan.
This assures the lender that the service member is indeed alive and well. This can be done by the service member either drafting up a statement or calling their loan officer on the day of closing to confirm. Before closing, you will receive the final closing disclosure, which provides you with the actual amount you are responsible for providing. Therefore, it’s a good idea to not undergo any major life events or make any major financial purchases until after you receive your closing disclosure. The best way to ensure your loan isn't denied after clear to close is to keep your job, continue paying all your bills on time and avoid making any purchases or taking out new loans. If your loan is denied at any point, the lender must send you a disclosure letter explaining why.
Putting anything on credit will adjust your credit score, debt-to-income ratio, and many other financial details, meaning everything will need to be checked yet again. Using credit at this point will essentially send you back to underwriting, and if the new numbers don’t meet the requirements, your loan can be denied. Instead, you should wait until after your loan has funded to make big purchases or take out any more credit. One of the significant milestones of the mortgage process is getting a clear to close. Essentially, clear to close means all the loan documents have been approved by the underwriter, and the bank will fund your mortgage as long as your credit or employment status hasn't changed.
No comments:
Post a Comment