The necessary steps in underwriting to close your purchase or refinance.
Both loan approval and final loan approval are necessary steps in underwriting to close your purchase or refinance. There are several stages of a loan’s “approval,” including “conditional” and “final.” Both types are formal loan approvals in writing from the underwriter.
“Conditional” is a loan approval received after the underwriter’s initial review of an entire loan file, including current income, assets, credit, property-specific documents, and/or the appraisal report. It is called “conditional” because the approval is dependent upon the satisfaction of all conditions associated with the transaction. Depending upon the number and nature of the requested conditions, the loan contingency may be lifted after conditional loan approval is granted.
Once all conditions are reviewed and cleared, the underwriter will grant “final” loan approval, also known as the “clear to close.” Final loan approval normally indicates that only the final signing appointment, loan’s funding, and county’s recording are required to close the purchase.