Conditional Approval 101
As the mortgage underwriter reviews your loan application, we may need a few additional details explained before we can give it “final” approval. When that happens, you’ll hear you have a “conditional loan approval.”
The underwriter will ask for information about the items in your application. Click on the video below for an overview of conditional approval.
What Does Conditionally Approved Mean?
Conditional approval on a mortgage application means your underwriter has verified your information, but some things need clarification. At this point, we may ask you to send more information or explain items in your application file, like a financial gift that you’re using for your down payment if you are purchasing a home.
Don’t panic. It’s not unusual for the underwriter to ask for an explanation or additional documents. Your Planet mortgage professional will let you know exactly what you need to provide.
On rare occasions, this additional information can lead to the loan being denied. The best way to ensure success is to provide accurate, complete information at every stage of the mortgage loan process.
What are the Common Conditions?
Common conditional approval conditions include:
- Income verification
- Bank statements
- Gift letters
- Additional paperwork to meet loan requirements
- Homeowners insurance verification
Though it may seem like a complicated step in the mortgage loan approval process, getting conditional approval is a sign that your home loan application is moving forward. It’s important at this stage to stay on top of your mortgage loan professional’s requests for documents.
Once you have sent everything the underwriter needs, the next steps after conditional approval are final approval and going to closing!
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