How Long Does It Take to Close on a House?
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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.
“Once the lender issues the Closing Disclosure, that pretty much means you’ve done everything needed to do as a buyer and you’re good to go,” says Sanchez. Once the three-day period has expired, you can have your documents notarized at the title company or you can have a mobile notary come to you. If you’re buying in a normal market transaction, rather than a foreclosure, it should take just 72 hours within submitting all of your information to be approved. Getting pre-approved for a mortgage before house hunting can speed this along. Then it can take an additional week after you provide all documentation to your loan officer. Before you even start searching for homes, take the time to get pre-approved so you’ll know ahead of time that you’re eligible for a loan in the amount you need.
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Lenders check borrowers’ credit at the start of the approval process and again just before closing. Even if you have been cleared to close and are eager to buy a property, you still have the ability to delay a closing. During the final walkthrough, you will go over the property with the listing agent and review any repairs that you had requested as part of your offer. If the seller has failed to make these repairs, or if new problems have cropped up, then you can delay the closing and renegotiate with the realtor. When it comes time for the full loan approval, the underwriter of the loan rechecks your financial status and then looks into the property you plan to buy. If the home is valued fairly and your finances are still in order, then you should be cleared to close.
Clear to close is further along in the mortgage process than a pre-approval, for example. At the start of the mortgage application process, you can get pre-approved to buy a home by financial lenders. After this pre-approval, an underwriter will need to review your documents and the state of the house for the actual lending process. Once everything is in order, you can enter the “clear to close” phase of home buying. The home appraisal is a necessary component of the homebuying process when you use a mortgage. An appraisal is required by mortgage lenders, because it prevents you and the lender from paying more than the house is worth.
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However, if anything is wrong with the house, this is your last chance to catch any issues before they become your responsibility. In practice, you are ready to close the loan the moment the underwriter signs off on it, which takes about hours. The problem is that you may not always be notified that you’re clear to close before receiving the closing disclosure. This includes a look at an updated credit score, final verification of employment, and checking to ensure the title is clear.
This check can happen when they send you the closing disclosure or even as late as closing day. In simple terms, getting cleared to close means that your mortgage loan application has been approved by a mortgage underwriter. While getting approved isn’t the final step to securing your mortgage loan, you’re only a few steps away. Clear to close means that an underwriter has approved your mortgage application, and you can now sign the loan documents. Obtaining a clear to close is a significant milestone in the mortgage process. Clear to close process and implementation can be expensive, frustrating, and time-consuming, but it will be mind-blowing if all reviews, terms and conditions, and requirements are in order.
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In order to ensure that these changes have indeed been made, the appraiser will need to re-inspect the house. Documentation of who paid for the repairs will need to be provided at this point. But if the necessary repairs have not been made, then the loan process will likely be put on hold until they have been completed. As this can push your closing date back even further, it’s a good idea to remind the current homeowner of the needed repairs as well as the due date. In an ideal setting, if you receive this document on a Monday, you can expect to close on the property no sooner than Thursday.
Underwriters will look at the documents you’ve sent them, as well as your income, debt-to-income ratio , credit history, assets, and the amount and type of loan you’ve asked for. Lenders usually require buyers to have homeowner’s insurance to protect their investment. However, even if your lender doesn’t require it, it would be in your best interest to get homeowner’s insurance anyway. With everything else in order, you’ll finally reach the long-anticipated closing day.
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Once you sign the necessary papers, your mortgage process is complete and you’ll be a homeowner. Some of the conditions that your lender may require you to meet can be submitting your bank statement, proof of income, a letter of notice for a big withdrawal, and so on. There are several mortgage application processes you’ll have to undergo to reach the clearance stage. When you’re buying a house, you’re going to come across a lot of terms and phrases that’ll make you scratch your head in confusion.
Typically, this is because something in your situation has changed. Being CTC isn’t the final destination for your loan, but most home buyers can look forward to a closing date right around the corner. Once your lender has notified you that you’re clear to close, a good majority of the mortgage process will be behind you. However, a few important stages still stand between you and homeownership. If your lender gives you a clear-to-close decision, you have the green light to proceed with scheduling a closing date.
Waiting on clear to close from an underwriter could be difficult once you’ve received the closing disclosure; you must wait at least 3 days before closing. This will give you the time needed to review the documents, ensure everything is correct, and prepare the checks you will need for closing day. Your mortgage provider will need to check a number of documents before they fully approve your application. First, your lender will want to see verification of your income and assets, such as pay stubs and recent bank statements. Then you’ll need to present your current debt and monthly expenses, which can help your lender determine your debt-to-income ratio. Finally, you might need to provide your lender with written permission to access your credit score.
Closing day is the day you sign all the paperwork, get the keys and become the official owner of a home. Clear to close means clear to close, and that means if you are using an FHA loan, the same rules apply even if the lender has different terms and conditions for you to follow. Once you confirm everything, you may move ahead to close the deal with the seller. “Do you have any unusual circumstances, such as money gifted from a loved one?
Once they’re clear to close, most buyers won’t have to wait long to meet at the closing table. Keeping this in mind, you should allow at least the 3-day rule to take effect between receiving your closing disclosure and closing. Understanding your closing disclosure is a critical step in the home-buying process. Ensure you do not sign a document containing errors or provisions detrimental to your repayment plan. Simply put, clear to close is defined as the final stage of loan approval from an underwriter after reaching the requirements and conditions for a mortgage.
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