Buying a home is an exciting journey, but understanding the Initial Underwriting Approval process can help set clear expectations and reduce stress. This stage is when your mortgage file undergoes a detailed review by an underwriter to ensure it meets all guidelines and program requirements.
A mortgage file is submitted to underwriting after the Processor has completed the processing stage of the mortgage. The initial underwrite of the mortgage loan process typically takes 48 to 72 hours.
Here’s a comprehensive guide to help you navigate underwriting approval, its conditions, and what happens next.
What Is Initial Underwriting Approval?
The initial underwriting approval is the first step toward securing a “clear to close.” During this phase, the underwriter reviews your mortgage application and supporting documents to ensure compliance with lender and investor guidelines (e.g., Fannie Mae, Freddie Mac, FHA, VA).
Think of it as a teacher grading your homework: if you score a 90%, the underwriter identifies the remaining 10% of items (known as “conditions”) needed to complete your approval.
Typical Turnaround Time for Underwriting
- Average Timeline: 48–72 hours after submission.
- Busy Market: Up to a week.
- Slow Market: Often completed within 24 hours.
What Are Underwriting Conditions?
Conditions are additional requirements the underwriter identifies to finalize your loan approval. These can fall into three categories:
Lender Conditions: Internal documentation updates (e.g., correcting typos or verifying calculations).
Third-Party Conditions: Items from external entities (e.g., updated appraisal reports or HOA documents).
Borrower Conditions: Additional paperwork or clarification from you, such as:
- Updated bank statements.
- Letter of explanation for large deposits.
- Proof of resolved credit inquiries.
Tip: Respond to condition requests quickly to keep the process on track.
What Happens After Initial Underwriting Approval?
After receiving your initial approval, several actions will follow to move your loan toward closing:
1. Submit Conditions
- Upload required documents to your lender’s secure portal (e.g., Floify).
- Your Processor will compile and submit these to the underwriter for final review.
2. e-Sign the Initial Closing Disclosure (CD)
- The Initial CD outlines estimated costs and terms of your loan.
- A mandatory three-day waiting period starts once all borrowers sign the document.
Pro Tip: Signing the Initial CD promptly ensures your closing date stays on schedule.
3. Notify Lender of Any Contract Amendments
Let your lender know about any contract changes, such as:
- Seller concessions.
- Adjusted sales price.
- Repairs or lease-back agreements.
4. Credit Report Updates
- Before closing, your credit report may be refreshed to confirm no new debts have been added and verify balances on existing accounts.
- New credit inquiries or accounts require explanation letters and supporting documentation.
5. Final Employment Verification
- Lenders will contact your employer within 24–48 hours of closing to confirm your continued employment.
Submitting for “Clear to Close”
Once all conditions are satisfied, your file is submitted to underwriting for the final review. If everything is in order, the underwriter issues a Clear to Close (CTC), signaling that your loan is fully approved and ready for closing.
CTC Timeline: Typically within 24–48 hours after submitting the final conditions.
Important: Occasionally, the underwriter may request additional items if the submitted conditions raise new questions. Be prepared to respond promptly to avoid delays.
FAQs About Initial Underwriting Approval in Texas
How Long Does Initial Underwriting Take in Texas?
Initial underwriting typically takes 2–3 business days but can vary based on market conditions.
What Happens if My File Has a Lot of Conditions?
The number and complexity of conditions depend on factors like your loan type and file details. With a well-prepared loan package (as the Mortgage Mark Team provides), most conditions are minor and administrative.
Will My Credit Be Pulled Again Before Closing?
Not always. However, lenders often update your credit report to check for new debts or inquiries. Avoid large purchases or opening new accounts during the loan process.
What Is a Clear to Close?
A Clear to Close (CTC) means all conditions have been satisfied, and your loan is fully approved. This is the final step before scheduling your closing.
Why Choose the Mortgage Mark Team?
Navigating underwriting can feel overwhelming, but with our experienced team:
- You’ll receive a well-prepared file, minimizing conditions.
- We’ll guide you through every step, from initial approval to closing.
- Over 20 years of expertise ensures a smooth, stress-free process.
When you think mortgage, think Mark! Contact us today to get started on your home loan journey.
Mark Pfeiffer
Branch Manager
Loan Officer, NMLS # 729612
972.829.8639
MortgageMark@MortgageMark.com
Mortgage Loan Process Outline
Click here for an overview of each step.
- Loan Packaging & Lender’s Disclosures (1-2 days)
- Loan Setup (2-3 days)
- Processing / Credit Approval (2-3 days)
- Initial Underwriting Approval (2-3 days) <– YOU ARE HERE
- Sign the Initial Closing Disclosure (CD) (Immediate)
- Final Underwriting Approval (1-2 days)
- Docs to Title / Final CD Issued (1-2 days)
- Closing & Funding (TBD)
- After Closing