Buyer Step 17 - Clear to Close: Your Loan Gets the Green Light
Step 17
Clear to Close: Your Loan Gets the Green Light
Before the final closing, your lender will deliver the good news that you are “Clear to Close.” This means that the underwriter has thoroughly reviewed and approved all your loan documentation, including the appraisal, and the funds are ready for your loan.
Here's what you should expect:
Closing Disclosure Review: The lender sends you an initial closing disclosure, allowing you to review crucial details like loan terms, payment amounts, interest rates, and closing costs. By law, you should receive this document at least 3 days before the closing, giving you ample time to scrutinize the information. Compare it with the good faith estimate provided when you initially applied for the loan and clarify any discrepancies with your loan officer.
Timing of Clear to Close: The tentative closing time is often outlined in the purchase agreement, including a move-in date. This helps both the buyer and seller plan their transition. Typically, “Clear to Close” occurs within the final week of your escrow process. Your Loan Officer strives to align the closing time with the agreement, facilitating a smooth transition.
Possible Denial After Clearance: While uncommon, there have been instances of loans being denied after receiving clearance. This can result from taking on a new loan, job loss, or a credit score drop before the final closing. Aim to maintain financial stability between “Clear to Close” and the closing date.
Closing Arrangements: Your lender and Realtor® collaborate to schedule the closing with all concerned parties. If, for any reason, you cannot attend the final closing in person, promptly inform your loan officer and Realtor® so suitable arrangements can be made.
Receiving the “Clear to Close” is a significant step towards securing your new home. Stay vigilant during the document review and ensure financial stability leading up to the final closing.
