When Is A Mortgage Really Approved?

March 24th, 2019

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When is an approval really an approval? When is an approval only a conditional approval? Below are the different levels of “loan approval” you can get for a mortgage:


Pre-qualification is done before you make an offer on a home. It is only a loan officer analysis, and supporting financial documents are not required. Only a review of the applicant’s income and debts are done. Standard methods of determining housing and debt ratios are used. This can help indicate the maximum loan amount for which an applicant would qualify. But it is subject to the satisfactory appraisal, further verifications of income, employment and credit history. This is the lowest form of analysis you can have done.


This is also done before you make an offer on a home. But the consumer must provide all of the supporting financial documents, and an underwriter will underwrite the file. But, it is still not a final approval. A sales contract, appraisal, title work, and more may be needed. Additionally, from this point on there can be no changes to the borrower’s credit standing during the commitment period.

Conditional Approval:

This is not unlike a pre-approval, but the underwriter has completed the review of all documents after there is a ratified sales contract for the new home. All of the financial documents have been provided and the appraisal report has been received. At this stage most loan approvals still have some conditions. Hence the language “Conditional Approval”.

Cleared To Close:

This is when the consumer has satisfied all of the conditions of a “Conditional Loan Approval”. And now the loan is now “Cleared to Close”. This means there are no more questions or conditions to satisfy.

So when a loan officers says your loan is “approved”, be sure to ask for specifics!

To contact me to discuss your mortgage scenario, mortgage rates, or other mortgage questions, click here to schedule a call or you can email me directly.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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