When Getting a Loan What Does “Clear to Close” Mean?
For home buyers in Carlsbad, there are several common phrases typically heard in a real estate transaction that will bring a smile to the face, and perhaps a more jubilant reaction.
The first is “your offer has been accepted.” Who doesn’t rejoice when this is heard, especially when there are multiple offers?!
The second is commonly “the appraisal came in at value” or “the house appraised.” Waiting for the results of the appraisal is always a tense time, especially when your offer is high or above asking price. I just went through this with another buyer. Success, yay!
The next joyful phrase you hope to hear is “we are clear to close.”
So what does that mean?
Suffice it to say the mortgage application process is a complex one, with a ton of documentation you will have to provide the lender – bank statements (all pages, even blank ones), employment verification (pay stubs, W-2s, 2 years of taxes), other proof of assets, and the list goes on. See this excellent article by John Meussner that summarizes documents needed to get a mortgage. The lender also verifies your credit, reviews the purchase contract, checks the title, and of course requests and reviews the home appraisal.
Once all documents have been submitted, analyzed and verified, and the appraisal has been received, reviewed, and deemed satisfactory, the underwriter will let you know that you are clear to close.
In other words, your loan is approved and the loan documents can be prepared for you to sign in the future. The timing will depend on when you are scheduled to close and the lender’s standard process.
The last phrase I love sharing with buyer clients once closing has occurred is “we are on record.” Congratulations on your new home! Here are the keys!!
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