Our Buyers Lender Continues to Push Back the Close Date
When you decide to buy a home, you can enjoy the fun aspects of browsing new listings and touring potential properties. However, you won't get very far in the buying process without loan approval.
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.
Here's what you need to know about getting cleared to close and when you are likely to reach this status.
Looking for the perfect loan for you new home?
Consider UpNest Home Loans and save thousands.
What does clear to close mean?
If you have been cleared to close, then your loan has been approved, and you can move forward with the closing process. While lenders look at your financial documents during the pre-approval process, they take a deep dive to confirm their accuracy.
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.
How long after clear to close can you close?
Once you are cleared to close, you will receive a Closing Disclosure to sign from your lender. You will receive this letter three days before your scheduled closing date. As a buyer, it's important to acknowledge this disclosure immediately, or your closing date could get pushed back.
The Closing Disclosure will describe the loan terms in detail, including the monthly mortgage amount, closing costs, fees related to processing the loan, any loan disclosures, and a transaction summary table. This disclosure will have everything you need to know about your financial transaction.
However, this information shouldn't be surprising or new to you. Your underwriter likely walked through the loan terms during the pre-approval process and would only have made a few adjustments based on the final price and inspection of the house.
Once the three-day waiting period is complete, you can notarize your documents, close on the home, and start the move-in process.
When will you be cleared to close?
The process of clearing your loan to close and the actual closing date begins when you make an offer on a home that an owner accepts. Once you have an offer agreement, you will need to get the home appraised and inspected to make sure it's in good condition. The inspection will alert you to any undisclosed or unknown damage (like potential electrical issues or leaks), while an appraisal will confirm the true value of the property.
The appraisal is important because no one wants to overpay for a house — and lenders certainly don't want to give you more money than the house is worth. The sooner you have an accurate appraisal (and the closer that appraisal is to the offer you made) the faster you can close on a home.
As the buyer, you are responsible for paying for the inspection and appraisal. You don't need to disclose the results of the appraisal with the seller, and you have the potential to walk away from a sale if the value of the home comes in too low.
With all the inspections and paperwork in order, the underwriter can review your loan and share any outstanding conditions that need to be met to clear to close. Once these addendums have been wrapped up, your loan will be approved and you are able to close.
How long does it take to reach the closing process?
The average time to close a home is 47 days, from the day an application for a loan is submitted to the final signed documents. However, this number can fluctuate depending on your financial situation, your lender, and the seller who is moving away from the property. For example, if it takes longer for you to gather your paperwork and confirm your financial history, then you can slow down the closing process by several days.
The closing process isn't entirely in your control, either. There are certain government-mandated waiting periods to create transparency and prevent fraud. The underwriter can also take longer if they need to confirm your paperwork and buying contingencies on your loan.
The closing process can wrap up in 30 days or take longer than 60 days. By knowing the average time period needed to buy a home, you can plan your move and better understand the process.
Can your clear to close status get revoked?
You should feel comfortable if you have made it far enough in the approval process to get cleared to close. However, this doesn't mean that you are completely worry-free in the loan approval process.
After you have been cleared to close, your lender will check your credit and employment one more time, just to make sure there aren't any major changes from when the loan was first applied for. For example, if you recently quit or changed your job, then your loan status may be at risk. If you took out another loan to cover expenses or your credit took a hit, then your lender may flag your loan application.
If your lender denies your loan, then you will either need to end the buying agreement with the home seller or ask to push back the closing date so you can clarify any issues. However, with recently changed employment — even if you left your current job for an equal-or-higher paying one — you may need to wait 90 days or longer to prove that you are staying with that employer before you can get approved again.
Can you stop a closing as a buyer?
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.
For example, if a water heater breaks a few days before your closing and the homeowner doesn't fix it, you may be able to delay closing because the property you are buying is not in the state you expected it to be in.
Work With a Lender Who Can Help You Close on Time
If you want to buy a home in a competitive market, then you can get noticed and appeal to buyers with a loan pre-approval and an appealing offer. At UpNest, we work closely with buyers to secure their loans quickly so you can close on time. Our lending team strives to offer the best rates — and will either match what other lenders offer or pay you $1,000*.
Don't let a delayed loan prevent you from buying your dream home. Work with us so you can reach clear to close status on time and move into your new property.
* Terms and conditions apply .
Can a loan be denied after clear to close?
Usually a loan won't be denied after you're clear to close. However, if you have major changes to your credit report (like a new car or credit card), you can throw off your entire loan. You could delay or even cancel your closing by manipulating your loan-to-value ratio, for example. That's why most loan professionals recommend not opening any new lines of credit for 6 months before purchasing a home (or during the process).
Does clear to close mean approved?
"Clear to close" in terms of a buying a home means that a mortgage underwriter has approved your loan and all conditions for approval have been met. Your lender is also ready to move forward with a closing date with the title company, so you're more than approved. Clear to close is further along in the mortgage process than a pre-approval, for example.
How long does it take to clear to close?
The clear to close process is a three-day waiting period. Once everything is cleared to close and all the loan documents are ready, you'll be doing a lot of signing and getting things notarized. You'll receive a final Closing Disclosure detailing all of your loan terms, costs, and other details from the lenders for your review.
Source: https://www.upnest.com/1/post/clear-to-close/
0 Response to "Our Buyers Lender Continues to Push Back the Close Date"
Post a Comment