Clear to Close Mortgage: What Happens Next?

Clear to Close Mortgage: What Happens Next?

Table of contents

Buying a home can be exciting and stressful all at the same time. The process requires meeting many different requirements and submitting all the essential paperwork in order to receive mortgage approval. So when a lender calls to say you are “clear to close,” chances are you will feel as though everything is complete. However, receiving a clear to close notification doesn’t mean you are getting the keys and moving in, but it does mean you have taken a huge step toward the finish line. What you do next can determine just how quickly you can get your keys and start moving in.

Key takeaways

  • When your lender says you are cleared to close, this means that the underwriter has approved all your paperwork and that everything is in order for closing. However, there are still some steps before you actually close.
  • Even after your lender offers a clear to close status, certain circumstances can cause the lender to deny your loan.

What does it mean when your mortgage is ‘clear to close (CTC)’?

The home-buying process contains numerous different steps. These include finding the right home at a price within your budget, applying for a mortgage and providing a lender with all the necessary information and paperwork, and getting your desired home inspected. Receiving a clear to close notice means that the underwriter has received all the necessary paperwork, including the home inspection, and, after careful review, determined that you have the required creditworthiness and meet the terms for loan approval.

How long after clear to close can you close?

Once your lender lets you know you are clear to close, they will schedule your closing date. Three days before your scheduled closing, they will provide you with a Closing Disclosure document describing the details of the loan, your monthly mortgage payment, any closing costs and fees you must pay at closing, and a summary table. Lenders are required to give you these three days before the closing to go over the document and confirm the information.

When will you be cleared to close?

A borrower will be clear to close when the underwriters approve all the financial information provided, as well as the home inspection and appraisal. If they need any clarification or additional information, they will ask you to provide this information. Once everything has been submitted, and your loan documents are approved, you will receive a clear to close status and the closing date can be set with your title company.

Can your loan still be denied?

While a denial after a clear to close status is rare, it is still possible. Even though the underwriter has approved the loan, they will run your credit and verify employment one more time before closing. If anything has changed since you began the loan process, it can affect your approval.
For example, if you have opened a new line of credit since your initial application, your credit score may have dropped and will negatively affect your approval. In another case, maybe you have changed jobs since your initial application and now have a slightly lower income. This can also affect previous approval.

This is why it is important not to make any major changes to your finances once you submit a mortgage application. Even the smallest of changes can have a significant impact on the home-buying process.

How to get your loan cleared to close

When you are buying a home, your goal is to get your application status clear to close as soon and as easily as possible. Following these steps can help ensure you move the process along smoothly.

  • Provide all the necessary documents: At the start of your application, your lender will ask for a number of different documents in order to process your mortgage loan. Provide all the documents they ask for in a timely manner. Once your loan moves to an underwriter, they may ask for additional documentation. Again, provide this as quickly as possible.
  • Get a home appraisal: While the lender is crunching the numbers on your loan, schedule a home inspection and appraisal and provide that information to the underwriter.
  • Do not make ANY changes to your financial situation: Once you apply for a mortgage, you do not want to make any changes to your financial situation that could affect your mortgage loan process. This can include changing jobs, even if it is the same field and pay. Do not apply for any new lines of credit or credit cards.

What should you do after getting clear to close?

Once you receive a clear to close status, you simply wait for your scheduled closing date. Once you receive your Closing Disclosure document, thoroughly go over it and let your lender know you have received it. During this time, do not make any changes to your financial situation, such as new accounts or large transfers, deposits, or withdrawals as they can raise a red flag when the underwriter does a final check.

Frequently asked questions

Does clear to close mean I got the house?

In most cases, yes, a clear to close means you have been approved for a mortgage on the house you put an offer on. However, if your financial situation has changed since the start of the application process, it is still possible for the underwriter to deny the loan during a final credit and employment verification.

Is clear to close the same as final approval?

Clear to close means that the underwriter has approved the loan and that you, as a buyer, have met all the requirements. However, before you reach the closing table, the underwriter will do a final credit check and employment verification, and if anything has changed, it could affect your approval status.

Can you delay closing as a buyer?

As a buyer, you have the right to delay closing even after you receive a clear to close. For example, if, during the final walkthrough, you discover problems or see that the seller has not made any repairs that were part of the offer, then you can delay the closing because the home is not in the condition you agreed to.

Closing on your new home

As a borrower, the clear to close status means you have reached the final stretch in the home-buying process and will soon have keys in hand and be able to move into your new home. While it is unlikely at this stage, keep in mind that any major financial changes since your submitted your application can cause the underwriter to deny even after receiving a clear to close.

Helping you navigate the home-buying process

The home-buying process can be overwhelming, especially for first-time homebuyers. At Hero Home Programs, we understand how exciting yet stressful the homebuying process can be and our team is here to help you navigate and get the keys to your new home.

To learn more about how we can help, schedule a consultation today.

Picture of Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

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