What "Clear to Close" Actually Means (and How Close You Really Are)

Hearing that your mortgage is "clear to close" is the best news you can get during the homebuying process. It means the hardest part of the financial review is finally over. However, the loan process is not completely finished just because you hear those three words.

The Meaning of Clear to Close

Clear to Close means the loan has passed underwriting and all conditions for approval have been satisfied. This is very different from a mortgage commitment letter, which is an approval with conditions still to be met. Once you are cleared, borrowers will receive their Closing Disclosure at least 3 days before the scheduled closing.

How a Loan Can Still Be Denied

Your loan can still fall apart at the finish line. A loan can be denied after CTC if there is a dramatic financial change. Job loss, taking on a new large debt, or a new credit application can trigger the lender to pull their approval right before you get the keys.

Protecting Your Approval

The time between CTC and closing day requires financial discipline. Borrowers should avoid taking on new debt, making large purchases like cars or appliances, or applying for new credit. Keep your bank accounts and your credit profile exactly the same as they were when the underwriter approved your file.

Talk to your Loan Officer if you have any questions about the final steps of your loan process. Our Mortgage Brokerage will guide you safely through the final days before you get your keys.

Expect to close one week early.

Frequently Asked Questions

What does "clear to close" actually mean?

It means your loan has fully passed underwriting and every single condition for approval has been successfully satisfied.

Can my loan still get denied after I'm clear to close?

Yes. Your loan can be denied right up until funding if you lose your job, open new credit, or make large debt purchases.

How long after clear to close until I actually close?

You will generally close a few days after receiving your Closing Disclosure, which by law must be provided at least 3 days before the scheduled closing.

What should I avoid doing between clear to close and closing day?

You must avoid taking on new debt, making large purchases, changing jobs, or applying for any new credit cards or loans.