My mortgage broker told me she's waiting on the "clear to close". What does that mean exactly?
I was told we were pre-approved. Then that we were approved. I thought it had already gone through underwriting. Can someone help? I need to know the process in layman's terms!
- whiskeyman510Lv 71 decade agoFavorite Answer
Pre-approval just means the amount you want to borrow has been OK'd.
The clear to close means all the other things needed to close have been taken care of.
1. appraisal of your property (to make sure they aren't lending you more than it's worth)
2. Check of the city for leins. Meaning there aren't any outstanding judgements on your property placed by people you owe money to.
3. inspection of your property (to make sure it has no structural problems you might not be aware of.) They would not want to lend money on a house about to collapse.
4. survey from the city. To make sure their legal description of the property matches what you think you are buying. That way they don't lend you money to buy something a portion of which is legally someone elses.
- Anonymous6 years ago
The Pre-Qualification - Provided within minutes of the initial application
This letter is basically worthless. It means that the borrower has applied for a loan, their credit history has been examined and the lender/broker is relying solely on the information provided by the applicant regarding income, assets and ability to document each. A Pre-Qualification (pre-qual) is only as good as the borrower is honest.
The Pre-Approval - Provided within minutes of the initial application
See above (Pre-Qual).
The Approval - Provided within days of the initial application
The Approval is a little stronger than the Pre forms listed above in that the borrower has supplied the necessary documentation and satisfied the stipulations according to investor guidelines for a particular loan program. If this is an automated underwriting decision chances are good (very likely) that this loan will close. This is not a 100% certainty however. The underwriter may ask for a desk or field review on the appraisal and the value may be lowered. There may be additional documents required by the QC or Fraud Prevention department at the investor which cannot be produced. Issues with the property or the seller may be discovered during the QC/Fraud Prevention process. This is NOT a done deal.
Clear-To-Close - Provided within hours of the investor's receipt of the full loan package
Ah. The magic words. Unless the borrower does something super ignorant like quit their job, change jobs, do something drastic with their credit like buy a new car or boat, this baby is closed as far as the borrower is concerned. There may still be other issues with third parties or an undisclosed law suit or the like but this one is very highly likely to close. Not being able to assign an accurate likelihood to this loan closing I would just say 99.9% so that you get the point.
What You May Expect
You, as a seller or real estate professional, may expect your deal to close once the loan application has been stamped with the Clear-To-Close stamp. How long it takes to get that depends on how long it takes to get all the appropriate documentation and information to the investor's underwriting department.
- Anonymous1 decade ago
She's just waiting for the underwriter to cross all the "T's" and dot all the "I's". It's normal. The term means she knows everything is in place to close the transaction.Source(s): appraiser/realtor
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- Ron BerueLv 61 decade ago
The agent is waiting for the "bring-down" of your credit reports, the approval of the underwriter, mortgage commitment letter and the necessary requirements the Seller must have.
There will be a final bring-down on the day before or on the day of settlement. This is to make absolutely certain the lender is protected from getting involved in a bad transaction.
DO NOT borrow any money.
DO NOT cosign for any one! NOT EVEN parents or siblings.
Thanks for asking your Q! I enjoyed answering it!
Yes, that is my real last name!Source(s): My wonderful family! In the real estate business over 34 years in PA. My wonderful coaches & mentors. Yes, after all these years I continue having them in my corner! THE ABSOLUTE BEST, MOST WONDERFUL real estate investment group in the world, which I was very proud to be a member of! "THE University of Hard Knocks"
- Anonymous1 decade ago
That means that ALL the paperwork is in place - financing, appraisal, inspection, payoff letter from the seller's lender, title search, etc., etc.
- biancaLv 41 decade ago
simply put- "clear to close" mean OK from the lender to schedule transaction to be finalized-
- 1 decade ago
probably waiting on the loan or title company.