You'll eventually reach the long-awaited closing day if everything else is in line. When you attend your closing meeting, the home title is officially transferred and you become the new legal owner of the property.

Your closing day is all about wrapping up loose ends and finalizing the transaction. Signing all documentation, amending the deed, and paying your down payment and closing charges are all part of this process.

Can Your Loan Be Denied Even After The Closing Disclosure? 

After their loan has been authorized and the Closing Disclosure has been signed, clear-to-close buyers are rarely refused. However, in some cases, a lender may deny an applicant at this point. These rejections are frequently the result of significant changes in your financial status. 

Leaving your job, opening a new large credit line, or taking out another loan can all raise red flags with your home lender. If at all possible, avoid making any major improvements until the house is yours.

How Long Does It Take To Close After Being Cleared? 

Once they're cleared to close, most buyers won't have to wait long to meet at the closing table. Considering this, you should have at least a 3-day buffer between obtaining the Closing Disclosure and closing.

You should also be aware that if you discover any blockages between the time you're cleared to close and the actual closure, your closing time frame may be extended. For example, if you discover substantial concerns with the home during your final walkthrough, you may need to postpone your closing meeting to provide the seller with sufficient time to make these repairs. 

FAQs About Clear To Close

Is it better if I close at the end of the month?

If you arrange your closing near the end of the month, you will pay less in mortgage interest for the month in which you close. This might result in hundreds, if not thousands, of dollars in savings on closing fees. However, depending on your financial condition, it may make more sense for you to close at the beginning of the month. 

What makes a mortgage commitment letter different from clear to close?

A mortgage commitment letter is an assurance from a lender that they would lend you money; nevertheless, obtaining the letter simply implies you have finished the underwriting procedure for the loan you have sought. Before your mortgage lender fully approves your loan and you are cleared to close, you or the property may still need to meet certain final criteria. 

What are the underwriting standards for being clear to close? 

Your lender will go over the underwriting standards you'll need to achieve to become clear to close in your mortgage commitment letter. Your lender may normally seek the following to determine whether you have met these conditions:

• Current bank statements, tax returns, pay stubs, and other proof of income and assets
• A copy of the signed purchase agreement
• Proof that you have not taken on extra debt (for example, providing specifics or information regarding substantial payments to your accounts)
• Documented explanation of any unexpected financial situations
• A gift letter is used to document cash given by friends or family.

The Bottom Line: 'Clear to Close' Indicates You're Nearing the Finish Line

Although becoming CTC isn't the end goal for your loan, most home buyers can anticipate a closing date soon.

As with the other processes in your mortgage application, getting to your closing date as soon as possible will necessitate a thorough understanding of the clear-to-close process and what follows. Constant communication with your mortgage provider is critical to moving your application along swiftly, which is why it's critical to work with a lender you can fully trust.

While being clear to close indicates that you're nearing the end of the process, you can start your home-buying journey by becoming pre-approved. Knowing how much money you can borrow before you start shopping can allow you to shop smarter and make a more compelling offer when you find your dream property.