What Happens Between “Clear to Close” and Closing? - Right By You Mortgage (2024)

FAQs

What Happens Between “Clear to Close” and Closing? - Right By You Mortgage? ›

Clear to close means you're ready for the closing process, while closing refers to the act of closing on your mortgage loan. After you've been cleared to close you'll need to sign your closing disclosure, do a final walkthrough and attend your closing.

Generally, a few days pass between receiving a clear-to-close on a mortgage and getting to sign for your new house and keys. During this window, buyers can expect to schedule their closing date and time, review their final mortgage documents, and wire their funds for purchase.

Yes, even after receiving a 'clear to close' status, there's a possibility of being denied the loan.

According to ICE Mortgage Technology, conventional loans take an average of 44 days to close – 43 days on average for a purchase transaction and 46 days for a refinance. As we've mentioned, the underwriting part of this could take anywhere from a few days to a few weeks.

7 Days from Initial Disclosure –

Mortgage Closing Waiting Period. The Rule prohibits the lender and consumer from closing or settling on the mortgage loan transaction until 7 business days after the delivery or mailing of the TILA disclosures, including the Good Faith Estimate and disclosure of the final APR.

Your lender is required by law to give you the standardized Closing Disclosure at least 3 business days before closing. This is what is known as the Closing Disclosure 3-day rule. This requirement is thanks to the TILA-RESPA Integrated Disclosures guidelines, which went into effect on October 3, 2015.

If your financial situation changes or your credit score takes a hit before closing day, the lender could deny your mortgage. Making major purchases, applying for new credit or changing jobs are common mistakes that could put your mortgage approval at risk.

You have signed all the papers necessary and have reached an agreement. Your lender is bound by law to stick to your contract. After closing, your lender cannot go back on the arrangement they have made with you. Your loan can be denied anytime from the point of application to the point of closing.

If there are any changes to your credit score or employment status, your loan can be denied during the final countdown.

Do lenders pull credit day of closing? ›

Credit is pulled at least once at the beginning of the approval process, and then again just prior to closing. Sometimes it's pulled in the middle if necessary, so it's important that you be conscious of your credit and the things that may impact your scores and approvability throughout the entire process.

It is technically possible to close on a home in 30 days, or even less, particularly if you are paying all-cash rather than getting a mortgage or dealing with a homebuying company or iBuyer. But in general, according to data from ICE Mortgage Technology it takes about 44 days to close on a home.

Last step: exchange contracts – and move in!

With an official mortgage offer in your pocket from your lender, it's time to exchange contracts. That's when your solicitor and the seller's solicitor agree that all the paperwork looks good, and tell the lender to go ahead and send the mortgage money to the seller.

You've made it to the last step in the house closing process: signing the final paperwork. Closings usually take place at a title company with a closing agent and any co-borrower(s). There are also options now that allow you to do all of this online.

5. Time to close! This is the final step in the California escrow process, and the most important. At this stage, the homebuyer will provide a check for the closing costs that are due.

On average, closing on a house in California can take anywhere from 30 to 45 days, post-acceptance of an offer. This timeframe is fluid, influenced by the factors mentioned earlier. Each step, from financing approval to inspections, plays a crucial role in the overall timeline.

While it's rare, the short answer is yes. After your loan has been deemed “clear to close,” your lender will update your credit and check your employment status one more time.

Lenders typically do last-minute checks of their borrowers' financial information in the week before the loan closing date, including pulling a credit report and reverifying employment. You don't want to encounter any hiccups before you get that set of shiny new keys.

No, a closing disclosure is not the same as final approval. It is a document that outlines the terms of your mortgage loan, including the interest rate, fees, and other charges. You will still need to go through the underwriting process and receive final approval before closing on your loan.

Final loan approval means that your credit history, bank accounts, and income have all been thoroughly checked and you can move forward with your home purchase.