How Long Does it Take to be Clear to Close on a House?
6 minute read
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August 3, 2022

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Your mortgage process starts when you reach out to a mortgage lender. 

Borrowers who get pre-approved for their mortgage at the beginning of their home-buying or mortgage refinance journey can often experience a more streamlined process. 

As part of your mortgage loan application process, an underwriter reviews your information, and the home you want to buy will be appraised.

Once the underwriter approves your mortgage loan, your lender will let you know you are clear to close. 

But what does clear to close really mean? And how long does it take to clear to close?

What does clear to close (CTC) mean?

In the simplest terms, clear to close means that you meet the eligibility requirements for your specific mortgage loan or mortgage refinance loan.

Borrowers receive the clear to close after their mortgage application has been reviewed, a final credit check has been run, and supporting documents, such as any updated bank statements—have been reviewed and approved. 

Clear to close means homeownership is in sight. Now you can set the closing date, review your final closing documents, do a walkthrough, and take possession of your new home.

Is clear to close the same as mortgage pre-approval?

No, clear to close is not the same as a pre-approval. 

While there are similarities—both mortgage pre-approval and clear to close require an underwriter to review and evaluate your financial situation—they are not the same thing. One main difference is property inspection and appraisal. 

Clear to close typically requires an inspection and appraisal of the property you want to buy. Your new home’s assessed value, determined through appraisal, can impact loan approval. 

For example, if your new home’s value is too low, the underwriter may not approve the home loan. 

Is a closing disclosure document part of clear to close?

Once you’ve received notice from your lender that you’re clear to close, your title company will begin drafting the Closing Disclosure documents as part of the closing process.

Buyers receive the final Closing Disclosure documents three business days before the tentative closing date, and it’s important to review the information it contains carefully.

The Closing Disclosure document describes the key parts of your mortgage loan, such as:

  • Home purchase price 
  • Mortgage interest rate 
  • Loan fees 
  • Closing costs 
  • Homeowner’s insurance 
  • Other relevant expenses

If you have concerns about something in the Closing Documents or notice discrepancies compared to the terms outlined on the Loan Estimate you received as part of your mortgage pre-approval process, reach out to your lender directly.

Addressing an error in your Closing Disclosure document could mean a slight delay in closing, but it’s essential to address any concerns before closing on your home. 

Once any changes have been corrected, you’ll receive a new copy of the Closing Disclosure documents and have another three business days to review.

I’ve received clear to close. Can my loan still be denied?

Technically, yes.  

Although it doesn’t happen often, a home loan for a new home or for a mortgage refinance loan can be denied after a clear to close has been issued. 

This can happen when something has changed in your financial situation. 

For example, changes such as the following can all negatively impact your eligibility:

  • Change in employment status (e.g., being laid off from your job or starting a new job)
  • Taking on additional debt (e.g., getting a car loan or applying for a new credit card)
  • A major drop in your credit score, among other things  

To protect your financial situation and your approval, it’s generally a good idea not to make major lifestyle or financial changes until after closing.  

Your eligibility depends on your debt-to-income ratio, which is how much of your monthly income goes toward paying off debt. So if you increase your debt now, you could jeopardize your home loan.

Sometimes, however, changes are beyond your control. If that happens, it’s not necessarily an automatic denial of your home loan. 

It’s important to remember that everyone’s situation is unique—what you can qualify for will be based on your particular financial situation. Talking with a mortgage lender can help you find the best way forward.

How long does closing take?

While every agreement is different, if you’re buying a home in 2022, you can expect it to take between” four to six months” from start to closing, according to a recent report from Realtor.com. 

But remember, that’s only the average. 

Yours might close quicker—or could take longer—depending on several factors like whether you have a mortgage pre-approval letter, where you want to buy a home, or how competitive the market is where you are.

What’s the difference between my scheduled closing date and the actual closing date?

Chances are, your initial purchase agreement included a tentative or scheduled closing date. This helps sellers know the date they need to be out of the house and helps home buyers know when they can move in. 

For many home buyers, the actual closing date will be the same as the scheduled closing date.

Your real estate agent handles your closing timeline, and you’ll work out the details with them directly. 

I have an FHA loan or a VA loan. Can I still be clear to close?

Clear to close means the underwriter has evaluated your application and loan documents and has determined that you meet the eligibility requirements. 

Whether you have a conventional loan, a VA loan, an FHA loan, or are hoping to refinance your current mortgage, you’ll still receive clear to close on your loan. 

Get in touch with Assist Home Loans to guide you through your pre-approval process

If you’ve received your clear to close, your home-buying journey, which began with mortgage pre-approval, is wrapping up. 

Soon, all the paperwork will be finished, and you’ll be able to focus on settling into your new place and turning it from a house to a home.

And we’d like to help make that process as easy as possible. 

If you’re interested in buying a home, getting pre-approved for a mortgage, or have questions about any part of the home-buying process, reach out to the licensed loan officers at Assist Home Loans. 

We’re ready to help you make your dream home a reality. Contact us today.

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