After weeks of paperwork, waiting, and uncertainty, hearing “clear to close” brings a huge sense of relief to the homebuying journey. Your lender has reviewed everything, your loan has passed underwriting standards, and you’re finally ready to move forward with closing on your new home!

But that begs the question, what exactly does “clear to close” mean? And, more importantly, what are the next steps?

Here we’ll walk you through everything you need to know about the Clear to Close (CTC) status, from actually understanding what it means to prepping for a smooth closing day.

 

What is “Clear to Close”?

 Clear to Close (CTC) means your mortgage loan has been approved and you’re now ready to proceed to closing. Your lender has completed all necessary verifications, your loan has successfully passed underwriting, and all conditions for approval have been satisfied. 

 Let’s break it down. Being “Clear to Close” signals that:

• Your loan application has been fully approved

• All required documentation has been reviewed and verified

• The underwriting process is complete

• Your lender is ready to schedule your closing date

• No additional conditions or requirements remain

 

How “Clear to Close” is used in Real Estate

Clear to Close is usually abbreviated to CTC in emails, on mortgage documents, or in communications with your real estate agent. When someone says “you’re CTC,” it means you’ve received clear to close status and you’ve approved to move forward with finalizing your home purchase. 

 

Does Clear to Close Mean You’re Approved?

Yes, clear to close means your loan is approved. However, it’s important to understand that this approval is conditional on maintaining your current financial situation. Your lender can still deny your loan after clear to close status is achieved if significant financial changes occur before closing day. 

 

Clear to Close vs Other Mortgage Milestones

The mortgage approval process has many different stages, they can get confusing. Let’s clarify how clear to close differs from the other important milestones.

 Mortgage Commitment Letter vs Clear to Close

Though they are often confused, there is a clear difference between a mortgage commitment letter and clear to close status.

 

Mortgage Commitment Letter

• Usually issued after you’ve successfully completed the preapproval process

• States that you’ve been given preliminary approval for your home loan

• Signals that certain contingencies still need to be met

• Typically includes the loan amount likely to be approved

• Can be either conditional or firm (final commitment)

 

Clear to Close

• Issued when all loan conditions have been met

• Means you’re at the final step before signing

• No contingencies remain

• Your closing date can be scheduled

 But which comes first? The mortgage commitment letter typically comes right before you receive clear to close status. Think of it as a progression: conditional approval, firm commitment letter, clear to close.

 

Closing Disclosure vs Clear to Close

What is the relationship between clear to close and the Closing Disclosure?

Clear to Close is the approval status from your lender that you’re ready to proceed.

Closing Disclosure (CD) is a document that outlines your final loan terms, costs, and fees. By federal law, you must receive your Closing Disclosure at least 3 business days before closing.

The sequence: You typically receive clear to close status first, then your Closing Disclosure follows shortly after. Both must happen before you can attend your closing.

 

Conditional Approval vs Clear to Close

Conditional approval means your lender is willing to approve your loan if you meet certain conditions (such as providing additional documentation, paying off a debt, or explaining a deposit).

 Clear to close means all conditions have been satisfied and no further requirements remain.

 

How to Get Clear to Close on Your Mortgage

Reaching clear to close status requires completing several important steps and providing extensive documentation. Here’s exactly what you need to do to become clear to close.

 

Submit Your Complete Loan Application

Your journey begins with a complete mortgage application. Work closely with your loan officer to ensure all information is accurate and complete from the start. 

 

Provide Required Documentation

Your mortgage lender will need to verify your financial situation thoroughly. Be prepared to provide:

 Income Verification:

• Recent pay stubs (last 30-60 days)

• W-2 forms from the past 2 years

• 1099 forms if you’re self-employed or have contract income

• Tax returns for the past 2 years

 

Asset Documentation:

• Bank statements (last 2-3 months)

• Investment account statements (401(k)s, IRAs, CDs, brokerage accounts)

• Documentation of any rental income

• Gift letters if receiving DPA from family members

 

Additional Documents:

• Copy of the signed purchase agreement

• Homeowners insurance information

• Explanation letters for any unusual financial circumstances

• Documentation for large deposits in your accounts

• Proof you haven’t taken on new debt

 Be sure to organize these documents in advance and respond quickly to any lender requests. The faster you provide information, the sooner you’ll reach clear to close status.

 

Make an Offer on a Home

You can’t get clear to close until a seller accepts your offer. When making your offer, consider:

• How long the house has been on the market

• The extent of repairs you’ll need to make

• Competition from other buyers 

• Current market conditions

 

Complete Home Appraisal and Inspection

These are two important appointments that make sure you are getting the home value you expect.

 Appraisal - A licensed third-party appraiser determines the property’s fair market value. This protects both you and your lender by ensuring the home is worth the amount you’re paying.

Inspection - A professional home inspection helps you identify potential issues with the property before purchase. While not always required by lenders, skipping an inspection can be a costly mistake.

 

Navigate the Underwriting Process

The underwriting process is where your loan application receives detailed scrutiny. This is often the longest part of the mortgage journey.

 What do underwriters review?

• Your income: They verify your employment, calculate your average income, and ensure it’s stable and sufficient.

• Credit history: They review your credit report, payment history, and any derogatory marks.

• Debt-to-income ratio (DTI): They calculate what percentage of your monthly income goes toward debt payments.

• Assets: They verify you have enough money for your down payment, closing costs, and reserves.

• The property: They review the appraisal to ensure the home’s value supports the loan amount.

• Loan type and amount: They verify the loan fits within program guidelines

 

How long does underwriting take?

The underwriting process typically takes 30-45 days from application to clear to close. Though, with our GreenLight program, you should be able to get clear to close in 21 days.

 

Is there a way to speed up the process? 

Yes! Here are some things you can do you to make the underwriting process go by as soon as possible:

• Respond immediately to all documentation requests

• Don’t make any financial changes during underwriting

• Keep your loan officer informed of any changes

• Have all documents organized and ready

• Maintain open communication with your lender

 

Receive Clear to Close

Once underwriting is complete and all conditions are satisfied, your lender will notify you that you’re clear to close. Your loan officer will contact you, often followed by written confirmation, and will coordinate with the title company to schedule your closing date.

What Happens After You’re Clear to Close?

Receiving clear to close status is absolutely exciting, but you’re not quite finished yet. Several important steps remain between the clear to close status and becoming a homeowner.

 

Receive your closing disclosure (3-day rule)

After you’re clear to close, your lender will send you the Closing Disclosure (CD). This critical document outlines:

• Your final loan terms

• Interest rate and monthly payment

• Closing costs (itemized)

• Cash needed to close

• Property taxes and insurance amounts

It is important to note, federal law requires that you receive your Closing Disclosure at least 3 business days before your closing date. This ‘3-day rule” gives you time to review the numbers and ask questions. The closing cannot legally occur until this waiting period has passed.

 

What to Review on Your Closing Disclosure

• Verify your name is spelled correctly

• Confirm the property address is accurate

• Check that the loan amount matches your approval

• Verify the interest rate is as agreed

• Compare closing costs to your Loan Estimate

• Review property tax and insurance amounts

• Confirm cash to close amount

If you notice any errors of significant changes from your Loan Estimate, contact your loan officer immediately. Some changes may require a revised Closing Disclosure and restart the 3-day waiting period.

 

Complete Your Final Walkthrough

Your final walkthrough is your last chance to inspect the property before ownership transfers to you. While not legally required, skipping this step could be a costly mistake.

Schedule your walkthrough for 24-48 hours before closing, or even the morning of closing day if possible.

 

What to Check on Your Final Walkthrough

• Repairs completed: Verify all agreed-upon repairs from the inspection were finished properly

• Appliances included: Ensure all appliances that were part of the sale are present and working 

• No new damage: Check that no new issues have occurred since your last visit

• Property condition: Confirm the home is in the same condition as when you made your offer

• Utilities functioning: Turn on lights, run faucets, test appliances (have utilities turned on for this) 

• Property empty: If applicable, ensure the sellers have moved out and removed all belongings

• Inclusions present: Verify window treatments, fixtures, and other included items are still there

If you discover there are problems during your final walkthrough, document them with photos and notify your real estate agent immediately. Depending on the severity, you may need to postpone closing to give the seller time to address the issues.

 

Avoid Financial Changes

Between obtaining clear to close status and closing day, your financial situation must remain stable. Lenders often perform a final verification of your credit and employment right before closing.

Do not:

• Quit your job or change employers

• Apply for new credit cards

• Take out any new loans (car loans, personal loans, etc.)

• Make large purchases on credit

• Co-sign loans for anyone

• Make large deposits without documentation

• Open or close bank accounts

• Move large sums of money between accounts

These changes can affect your debt-to-income ratio, credit score, or employment verification. Even after being clear to close, your lender can deny your loan if significant financial changes occur.

 

Prepare for Closing Day 

• Get a cashier’s check or arrange wire transfer for closing costs

• Bring a government-issued photo ID

• Review your Closing Disclosure on final time

• Prepare any question for the closing agent

• Arrange for homeowner’s insurance to start on closing day

• Set up utilities to be transferred to your name

 

Common Clear to Close Questions (FAQ)

When do you get clear to close?

You receive clear to close status after the underwriting process is complete and all loan conditions have been satisfied. This typically occurs 30-45 days after your initial mortgage application, but at Total Mortgage we have the GreenLight program which gets you on the road to close within 21 days. 

 

How long does it take to get clear to close?

The time from application to clear to close typically ranges from 30 to 60 days, but with Total Mortgage’s GreenLight program, that time can be cut down to just 21 days. Factors that influence timing include:

• How quickly you provide documentation

• Complexity of your financial situation

• Type of loan (FHA, Conventional, VA, etc.)

• Appraisal timing

• Lender workload

• Whether any complications arise

 

Can you be denied after clear to close?

Yes. It is possible to still be denied after receiving clear to close status, though it is rare. Lenders typically perform a final credit check and employment verification right before closing.

Reasons for denial after clear to close could include:

• Job loss or employment change

• Taking out new credit or loans

• Large unexplained deposits or withdrawals

• Significant drop in credit score (20-30 points)

• Undisclosed debts discovered

• Issues with the property title

• Failed final employment verification

This is why it’s crucial to avoid any financial changes between clear to close and closing day.

 

What is the difference between clear to close and closing disclosure?

Clear to close is your approval status. It means your lender has approved your loan and you’re ready to proceed to closing.

Closing disclosure is a document that details your final loan terms and costs. You must receive this at least 3 business days before closing.

You typically receive clear to close first, followed by your Closing Disclosure within a day or two.

 

How long does clear to close take after underwriting?

If your loan file is “clear”, meaning the underwriter has no additional conditions, you can receive clear to close status immediately or within 1-2 business days after final underwriting approval.

If conditions exist, the timing depends on how quickly you can satisfy those conditions and how quickly the underwriter can review your responses.

 

What to Expect at Closing

Closing day is when the property officially becomes yours. Here’s what you need to know to prepare.

 

What Happens at Closing?

At your closing meeting (also called “settlement”), you’ll:

• Review and sign numerous documents

• Pay your closing costs and down payment

• Receive the keys to your new home

• Officially become a homeowner!

 

Documents You’ll Sign at Closing

Be prepared to review and sign multiple documents. Your closing agent will explain each one, but here’s what to expect:

• Closing Disclosure (Final Review) - You’ve already received this document, but you’ll review it once more at closing to confirm all numbers are correct and nothing has changed.

• Promissory Note - This is your formal promise to repay the loan. It includes:

• Loan amount

• Interest rate

• Monthly payment amount

• Repayment schedule

• Late payment penalties

• What happens if you default

• Mortgage or Deed of Trust - Depending on your state, you’ll sign either a Mortgage or a Deed of Trust. This document:

• Secures the loan by placing a lien on the property

• Gives the lender the right to foreclose if you don’t make payments

• Outlines your obligations as a borrower

• Deed - The deed transfers ownership of the property from the seller to you. This document will be recorded with your county to make the transfer official.

• Title Insurance Documents - You’ll receive:

• Owner’s title insurance policy, protects your from title defects or ownership claims

• Lender’s title insurance policy, protects your lender’s interest

• Other Closing Documents - Additional paperwork may include:

• Affidavits and declarations

• Initial escrow disclosure (for property taxes and insurance)

• Itemized list of closing costs

• Property tax declarations

• Homeowners association documents (if applicable)

• State and local disclosures

 

How Long Does Closing Take?

Closing typically takes 1-2 hours, though it can be shorter or longer depending on:

• Number of documents

• Questions you have

• Number of parties involved

• Complexity of the transaction

 

What to Bring to Closing

Required:

• Government-issued photo ID

• Cashier’s check or proof of wire transfer for closing costs

• Proof of homeowner’s insurance

• Copy of your Closing Disclosure

 

Optional but helpful:

• Your real estate agent

• Attorney (if you hired one)

• List of questions

• Calculator

 

After Closing: You’re a Homeowner!

Once all documents are signed and funds are transferred, you’ll receive:

• Keys to your new home

• Copies of all signed documents

• Information about your first mortgage payment

 

Congratulations! You’re officially a homeowner!

 

Final Tips for a Smooth Clear to Close Process

Do:

• Respond quickly to all lender requests

• Keep your job and income stable

• Maintain your credit score

• Stay organized with all documentation

• Communicate regularly with your loan officer

• Review all documents carefully

• Ask questions if anything is unclear

• Keep copies of everything

 

Don’t:

• Make large purchases

• Apply for new credit

• Change jobs 

• Move money between accounts without notice

• Miss any payments

• Co-sign loans

• Make large cash deposits

• Close credit accounts

In Summary

Being clear to close is an exciting milestone that signals you’re almost at the finish line of your home buying journey. It means your lender has thoroughly reviewed your financial situation, your loan has passed underwriting, and you’re approved to proceed to closing.

However, clear to close doesn’t mean you should let your guard down. Maintain your financial stability, avoid any major changes, complete your final walkthrough, and carefully review your Closing Disclosure. By following these guidelines, you’ll be well-prepared for a smooth and successful closing day.

Within days of receiving clear to close status, you’ll be signing documents, receiving keys, and stepping into your new home as an official homeowner

 

Ready to start your home buying journey?

Understanding the clear to close process is just one part of successfully purchasing a home. Work with an experienced loan officer who can guide you through each step and help you reach CTC status as efficiently as possible.

Disclaimer: This article provides general information about the Clear to Close process and should not be considered legal or financial advice. Mortgage requirements, timelines, and processes can vary by lender, loan type, and location. Always consult with your loan officer or mortgage professional for guidance specific to your situation. Closing procedures may vary by state and local jurisdiction.