When a loan is "clear to close", it means that all the conditions of the loan have been satisfied, and the lender is ready to finalize and fund the loan. This is a significant milestone in the loan process, and typically occurs after the borrower has completed the loan application process, provided all required documentation, and the loan has gone through underwriting.
During the underwriting process, the lender reviews the borrower's financial information and creditworthiness, as well as the details of the property being financed. If there are any conditions that need to be met before the loan can be approved and funded, the lender will provide a list of those conditions to the borrower, and the borrower will need to provide additional documentation or information to satisfy those conditions.
Once all conditions have been met and the lender has reviewed and approved all documentation, the loan will be cleared to close. The lender will prepare the final loan documents, including the loan estimate, closing disclosure, and promissory note, and schedule a closing date with the borrower.
At the closing, the borrower will review and sign all the final loan documents, pay any closing costs or fees, and receive the funds for the loan. After the loan is funded, the borrower becomes responsible for making payments according to the terms of the loan.
