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CLEAR-TO-CLOSE
Can I Get A Clear To Close In 2 Weeks Or Less?
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1 Reply
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What does “Clear to Close” mean in the mortgage process?
Clear to Close (CTC) represents the final green light from the underwriter. It’s a sign that they have reviewed your documentation, met all necessary conditions, and are ready to prepare closing documents for signing. When you receive a clear to close, the finish line is just a few steps away.
Step-by-Step Mortgage Process Leading to Clear-to-Close
Here’s what typically happens at each stage leading up to getting a clear-to-close letter:
Pre-approval:
Initial application: You fill out a mortgage application with all of your financial details—income, assets, and debts.
Pre-approval letter: The lender will tell you how much you’re pre-approved based on your financial profile, credit score, and other things).
House hunting and offer:
Find a home: You search for homes within your budget.
Make an offer: Once you find one that meets your needs, you make an offer through your real estate agent. If accepted, both parties sign a purchase agreement contract.
Mortgage application:
Complete application: Submit formal mortgage application with all required documentation (paystubs, tax returns, bank statements).
Loan Estimate: The lender will provide a Loan Estimate that discloses the estimated fees and costs of the mortgage loan.
Processing:
Order appraisal: The lender orders an appraisal of the property. They hire a third-party company for this service.
Title search: A title company researches public records to ensure there are no legal claims or liens against the property that could prevent its sale.
Verify documents: Verify all necessary financial documents and information the borrower or debtor provides. Confirm the accuracy of everything stated on the loan application (employment history/annual salary/assets/liabilities).
Underwriting:
Initial underwrite: The underwriter reviews the loan file submitted by the processor, along with the credit report(s), appraisal(s), and income and asset documentation. The underwriter reviews the borrower’s documents to determine whether the borrower or debtor qualifies for mortgage financing.
Conditional approval: If the underwriter determines that the application and documents contain missing or inadequate items. The mortgage underwriter will issue a conditional approval. A conditional loan approval means certain conditions must be satisfied before closing.
Satisfying conditions:
Submit additional documentation: Borrower and debtors provide requested items to satisfy any outstanding conditions outlined in conditional approval issued by the underwriter.
Final review: After receiving all necessary documents from the processor and loan officer, the underwriter performs a final review of the file and verifies that all required information has been submitted and complies with guidelines.
Clear to close:
Final approval: Once the underwriter is satisfied that all loan conditions have been met, they will issue a clear to close. At this point, the lender has approved everything needed for the settlement agent (closing company or attorney) to start preparing the closing package, which includes the deed and mortgage note.
Closing Disclosure:
Receive Closing Disclosure (CD): The consumer receives a CD from the lender at least three business days before closing. This CD gives detailed information about loan terms and costs and the cash needed to close.
Closing:
Sign documents:
- Borrower(s) attend the scheduled closing meeting (usually at the title company).
- Sign all necessary paperwork, including a promissory note, mortgage and security instrument(s), and truth-in-lending statement(s).
- Deliver cashier’s check or wire funds for any remaining closing costs and prepaid or provide evidence of satisfactory funds required via bank statement(s).
Funding: After signing the docs, the lender reviews them along with other conditions (if applicable). Once satisfied, the lender wires/disburses loan proceeds directly into the escrow account established by the settlement agent, allowing ownership to transfer to the buyer, borrower, and seller’s bank.
My Perspective:
Obtaining a clear to close in fourteen days is hard but doable if you plan well and work efficiently. To achieve that, you should be proactive, stay on top of things as they arise, and cooperate with an industrious loan officer.