So you received your home loan pre-approval application papers and see that there’s a note on it that says “approved with conditions”. Now you probably think that you’ve been approved for a mortgage. But wait, what about the conditions? Have you been approved or not?
Understanding a Conditional Mortgage Approval
A condition approval on a mortgage application means that the underwriter is more or less satisfied with your application documents, but that you need to resolve some “conditions” to be approved, explains an experienced home loan officer from VIP Mortgage in Tempe. The mortgage underwriter is assigned by your potential lender to review your loan application documents to make certain that it satisfies all the requirements and guidelines of the lender.
If the underwriter decides that everything seems to be in order with your application, but certain things need some clarification, you’d be issued a conditional approval. In most instances, underwriters usually request for clarification on the following issues or a copy of certain documents:
- A letter of explanation in case you made a recent, sizable deposit or withdrawal
- Verification of your current income and/or employment
- Your mortgage insurance documents
- A copy of your homeowner’s insurance plan
- Other incomplete or missing paperwork require for loan funding
Take note that the underwriting process would differ significantly from the borrower to another such that you might receive other conditions during the underwriting process, while a friend that’s going through underwriting might get approved by the underwriter without any conditions whatsoever.
So Will My Mortgage Go Through?
Mortgage approval involves various stages, with the last being the final approval, when your mortgage would be funded before or during closing day. That said, it’s vital to understand that things could go awry at any stage during the entire process and the best thing that you could do once you receive your conditional approval is to satisfy the underwriter’s conditions as promptly as possible because your application would essentially be on hold until you could meet the conditions. Be proactive and patient to avoid further delays and get the ball rolling on your final approval.