You heard the words ‘you’re approved’ and you assume you’ll close soon. Not so fast, though. If you have a conditional approval, there’s still work to do. Your lender approved the qualifications you’ve provided proof of, but there’s more.
So how long before you can close?
You and the Lender Must Work Together
First, there’s no one-size-fits-all timeline. The lender’s workload and capabilities determine your turnaround time. Is the lender overbooked with lots of loans or are you at the top of the queue? This makes a difference.
If you are in a hurry to get to the closing table, turn your documents in fast. The longer you wait, the further down the lender’s queue you fall. Lenders get busy in the blink of an eye – don’t get lost in the shuffle.
What are the Conditions?
Sometimes you can’t satisfy the conditions yourself. Home appraisals and title searches depend on third-party services. Follow up with the service providers to see the progress made. Appraisers must rely on the seller’s availability, which can be another issue. Do what you can to get the processes moving.
Some conditions pertain directly to you, though. An additional paystub, clarification of a debt on your credit report, or another asset statement are things you can provide fast. Stay in direct contact with your loan officer. He or she can tell you what the lender needs right away.
Do You Have Your Insurance?
Lenders require proof of homeowners insurance before you close. You need a binder and paid receipt. Again, you are relying on a third-party. Enlist the help of your loan officer to get the insurance agent moving. Pay your annual premium and request copies of the declaration page and paid receipt as fast as possible.
Keep Your Qualifications the Same
Here’s a tricky one. Lenders re-verify most factors before you close. They’ll call your employer. Are you still employed? If yes, the lender moves onto the next thing. If no, you’ll go back to the drawing board. The lender will need to know why you don’t work at the same job anymore. They’ll also need proof of where you work now. This could delay the closing process because many lenders require at least 3 to 6 months on the job before you close.
The same thing is true for your credit. Lenders pull it again right before the closing. Did your credit score change a lot? If so, why? Did you take out new credit or miss a bill? If the score decreased too much, you may lose your approval. If it’s the same or close to the same, you may be able to get that clear to close.
Conditional Approvals Mean Many Things
A conditional approval could mean so many things. Each lender has different requirements. Don’t assume that you are good to go once you have an approval with conditions. Talk to your loan officer about what you need to do. Then take the necessary steps.
The quicker you act no matter the conditions, the faster you get to the closing table. If third parties are involved, try to stay in contact with them too. If you can’t, ask your loan officer to do it for you. The more follow up you do with everyone involved in the process, the faster you’ll get to the closing table.