Clear to Close Mortgage Guide

By PropertyClub Team
Apr 15th 2023
Clear to close means that an underwriter has cleared your mortgage application to move forward with signing the documents to close on the loan. It's not quite a final approval, but you're almost there. 

One of the significant milestones of the mortgage process is getting a clear to close. Essentially, clear to close means all the loan documents have been approved by the underwriter, and the bank will fund your mortgage as long as your credit or employment status hasn't changed. But what happens after clear to close, and can you still be denied? Here's what you need to know. 

hash-markTable of Contents

What Happens After Clear to Close?
How Long After Clear to Close Can You Close?
Is Closing Disclosure the Same as Clear to Close?
Can You Be Denied After Clear to Close?
What to Do After Clear to Close
Clear to Close FAQ

hash-markWhat Happens After Clear to Close?

  1. Closing Disclosure
  2. Final Walk-Through
  3. Closing Day

1. Closing Disclosure

Once the bank gives you the clear to close, they'll run your credit one final time and re-verify your employment status. If everything looks good, they'll start preparing the closing disclosure for your loan. The lender will send you the closing disclosure at least three days before the closing date. The closing disclosure will include the terms of the loan, including the monthly mortgage payment, the total closing costs, the loan fees, loan disclosures, and contact information. You'll want to review this information and prepare for closing.

The closing date will also have been finalized by now, and if everything looks good, it's just a matter of time before you formally close on the home. 

2. Final Walk-Through

The next step will be the final walk-through, which typically takes place on closing day. While you perform the final walk-through, it's essential to make sure the house is in the agreed-upon condition and that the seller has taken care of any promised repairs. If everything looks good, you can proceed to the closing. 

3. Closing Day

Closing day is the final step to purchasing a home. The closing itself will typically take around an hour or two and will be attended by all the parties. At the closing, you'll finalize the paperwork and the title of the home will be transferred to you. You'll also need to prepare checks for the seller and closing costs in advance.

hash-markHow Long After Clear to Close Can You Close?

You can close as soon as three days after being cleared to close, assuming you receive closing disclosure the same day. If you receive notice that you're cleared to close prior to receiving the closing disclosure, you'll need to wait a bit longer as you must receive the disclosure at least three days before closing. In most cases, you can expect to close 4 to 7 days after you're clear to close.

hash-markIs Closing Disclosure the Same as Clear to Close?

Receiving a closing disclosure means you are clear to close, but the terms aren't entirely synonymous. Technically speaking, you are clear to close the moment the underwriter signs off on the loan, and it can take between 24-72 hours from then to receive your closing disclosure. Where the confusion lies is that you may not always be notified that you're clear to close prior to receiving the closing disclosure. 

Once you've received the closing disclosure, you have to wait at least 3 days before you can close. That gives you time to review the documents, ensure everything is correct, and prepare the checks you'll need for closing day. 

You must confirm receipt of the closing disclosure as soon as possible to prevent your closing date from being pushed back. 

hash-markCan a Loan Be Denied After Clear to Close?

Yes, it's possible for a loan to be denied after clear to close if your credit score drops or you lose your job. It's best to think of clear to close as approval that is contingent on your credit and employment, which the bank will check once more after clear to close. This check can happen when they send you the closing disclosure or even as late as closing day.

The best way to ensure your loan isn't denied after clear to close is to keep your job, continue paying all your bills on time and avoid making any purchases or taking out new loans. 

hash-markWhat to Do After Clear to Close

Once you're clear to close, the best thing to do is to keep your situation as stable as possible. Don't change your finances, open new accounts, make expensive purchases, or start a new job. Just wait until you receive your closing disclosure, and confirm receipt so that you can move forward with the closing efficiently and enjoy your new home. 

hash-markClear to Close FAQ

1. Does clear to close mean approved?

Clear to close means the underwriter has approved the loan documents and the bank will fund the mortgage as long as your employment status or credit hasn't changed. Essentially, as long as you haven't taken on new loans, gotten fired, or started a new job, clear yo close means you're approved. 

2. Can you close the same day you get clear to close?

You cannot close on a house the same day you get clear to close. You won't need to wait too long, but it will take at least 3 days before you can close. 

3. Do lenders verify employment after closing?

In most states, lenders will verify your employment before the closing. However, lenders will verify employment after closing papers are signed if you live in a state where lenders are not required to fund the mortgage loan at closing. Typically they will simply conduct a final verbal verification of employment before funding the loan.

4. What happens a week before closing?

Once you receive the clear to close, you can expect to close within a week. The clear to close timeline moves pretty quickly. In that week the bank will verify your employment and run your credit once more and provide you with the closing disclosure. After signing the closing disclosure, you need to wait 3 days before the closing, during which you will perform a final walk-through and prepare the necessary checks for closing day.