What Happens Between “Clear to Close” and Closing?

This Article Is About Clear To Close In The Mortgage Process And What Does The CTC Mean

The mortgage process is an actual process. There are various steps in the mortgage process.
There are also various mortgage professionals and departments that each file goes through.

There is no short cut in the mortgage process. Everyone from the loan officer, loan officer assistants (LOA), processing assistants, mortgage processors, support and operations staff, and the mortgage underwriter work as a team and in unity to get a borrower approved and closed. If the team of mortgage professionals can all work together with the common goal is not just closing the loan but closing it on time, it will happen. Teamwork is key in the mortgage industry. The ultimate goal for every borrower’s loan package is to get a clear to close. A clear to close is often referred to as the CTC. The CTC is issued by the mortgage underwriter after she has cleared all conditions from the conditional loan approval.

A clear to close means the borrower has met all agency guidelines as well as the lender’s internal overlays and the lender is ready to prepare closing docs and fund the loan.

Steps In The Mortgage Process Leading To A Conditional Loan Approval
Steps In The Mortgage Process Leading To A Conditional Loan Approval

There are steps that lead to the mortgage underwriter to issue a clear to close.

The loan officer will qualify the borrower. Once the borrower is fully vetted and qualified, the loan officer will issue a pre-approval letter. Armed with a solid pre-approval letter, the borrower can start shopping for a home to purchase. Once the homebuyer enters into a real estate purchase contract, it is at this time where the time clock starts. The executed real estate purchase contract is then submitted to the loan officer. The loan officer will request updated documents such as updated paycheck stubs, updated 60 days bank statements, and other important documents. A mortgage processor is then assigned to the file. The mortgage processor is the person that will oversee the file from intake to processing, underwriting, clear to close, and closing. The mortgage processor is the quarterback in the entire mortgage process. The processor is the person who prepares all docs for the mortgage underwriter.

The processor makes sure all docs are legible, there are no missing pages, and are properly labeled.
If a mortgage underwriter cannot read a document and/or the paperwork is not complete, the underwriter will not waste any more time and just kick it back to the mortgage processor.

This is when delays in the mortgage process happen and could delay the home loan closing.
Once the mortgage underwriter reviews and underwrites the file, the underwriter will issue a conditional loan approval if the underwriter feels the borrower qualifies. The mortgage processor is in charge of clearing conditions for the mortgage underwriter.

Teamwork By Mortgage Professionals Is The Key In Getting To Clear To Close

The goal of the borrower, the loan officer, mortgage processor, mortgage underwriter is to have every borrower’s file get a clear to close as soon as possible.

However, mortgage underwriters needs to protect the interest of the lender and make sure the borrower meets all the agency mortgage guidelines. Many lenders have lender overlays. The mortgage underwriter needs to make sure the borrower meets not just the agency guidelines but the lender overlays as well. The mortgage underwriter needs to make sure the loan is salable on the secondary mortgage bond market after the loan funds. The mortgage underwriter has a lot of responsibilities.

A clear to close means the mortgage underwriter has fully vetted the borrower and the property.
The underwriter issues a clear to close after she feels comfortable to instruct the closing department to prepare closing docs and wire the funds.

What Happens After The Mortgage Underwriter Issues The Clear To Close

Mortgage Underwriter Issues The Clear To Close

A clear to close is what every loan officer, borrower, seller, mortgage processor, real estate agents are hoping for. However, it takes time and a lot of preparation leading to the clear to close.
The mortgage processor needs to clear conditions from the conditional loan approval.

Sometimes mortgage underwriters can issue fresh conditions after reviewing the initial conditions from the conditional loan approval. There are instances where mortgage underwriters and processors can go back multiple times with updated conditions back and forth before the underwriter feels satisfied to issue the CTC. The great news is the mortgage process leading to the home closing is quick and fast after the clear to close. As soon as the mortgage underwriter issues the CTC, the file is then transferred and assigned to the lender’s closing department and a closer is assigned to the file.

The closer does not waste any time in making arrangements with the title company in setting up a closing date. The closer and the title agent will work together in putting the final numbers together.

The closing package and the wire is sent out to the title company. At closing, the buyers, sellers, realtors, and attorneys are present. Once the closing docs are signed by the homebuyers and sellers, the lender will approve the signed paperwork and releases the funds.


Peter has 7+ years of experience in residential lending. He is a licensed Realtor in the Chicagoland area.

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