One of the best things a homebuyer can hear is, “we have ‘clear to close.’”
It’s one of the biggest milestones in the mortgage lending process and
means the underwriter has cleared the application to move forward to
document signing and close of escrow. While a critical stage for the sale,
this is not the final step in closing on a new home. There are several things
that can still affect the transfer of title.
After the underwriter clears the file, the buyer will receive the closing
disclosure. This is provided at least 3 days before the closing date and
provides the final fees and costs. There shouldn’t be any surprises in the
document, but the buyer must review and make sure the terms are
acceptable. The close date will also be finalized at this time. Any
discrepancy in the terms of the document and the buyer’s expectations can still
throw a wrench in the closing.
Another step after “clear to close” is the final property walk-through. The
buyers and their agent will walk through the home and make sure that the
condition is the same as it was at the time of the offer. They will also check for
any agreed-upon repairs. Finally, many lenders perform one more credit
check and job or other verifications on the day of the close. Any change can prevent
the loan from closing.
Typically, after a “clear to close” is issued, you can expect to close 4-7 days
later. Understanding the steps to close will prevent misunderstandings and
help buyers plan their move accordingly.