Clear to Close is a term used in the mortgage and real estate industry to indicate that the lender has completed their review of all necessary documents and has approved the loan for closing. It is one of the final steps in the homebuying process, signaling that the borrower has met all the lender’s requirements and is ready to proceed to the closing table.
Key Points About "Clear to Close":
1. Final Approval: It means the loan has passed underwriting, and all conditions set by the lender have been satisfied. This includes verifying the borrower's income, credit, assets, and any other documents required.
2. Preparation for Closing: After receiving the "clear to close," the lender will work with the title company and other parties involved to prepare the final loan documents.
3. Timing: Borrowers typically receive the "clear to close" a few days before the scheduled closing date, giving them time to review the closing disclosure.
4. Closing Disclosure: Once clear to close is granted, borrowers receive the closing disclosure, which outlines the final terms and costs of the mortgage. By law, borrowers must receive this at least three business days before closing.
5. Next Step: Closing: After the "clear to close," the borrower attends the closing meeting, where they sign all necessary documents, pay closing costs, and officially take ownership of the property.
Essentially, "clear to close" means the home purchase or refinance process is nearly complete, and all that's left is the formal closing.
