What happens after appraisal and underwriting?

For hopeful homeowners going through the mortgage process, getting through the critical appraisal and underwriting steps brings excitement that the deal is nearing the finish line. While securing financing is a major milestone, buyers still wonder – what happens next after the lender has reviewed the appraisal and signed off on underwriting approval?

What happens after appraisal and underwriting?

After successfully completing appraisal and underwriting, the borrower receives final mortgage commitment, commonly referred to as clear-to-close (or CTC). Prior to closing, they receive a final closing disclosure and perform a walk-through. At closing, all documents are signed, funds are transferred, and the property deed is recorded. The buyer then acquires keys, takes possession of the house, and transfers loan servicing.

1. Mortgage commitment

The lender formally confirms their approval with specific final loan terms, including interest rate, total fees, and maturity date. This approval is also known as a clear-to-close, or CTC for short.

2. Closing disclosure form

Within 3 days of the scheduled closing appointment, borrowers receive a final closing disclosure outlining total costs to finalize the transaction, including lender charges, taxes, title fees, and any credits from the seller.

3. Final walkthrough

Buyers and agents physically tour the home shortly before closing, often the same day, to verify condition and ensure no new damage or problems have arisen since initial showing.

4. Closing appointment

The buyers meet with representatives of the title company to conduct the closing appointment where all remaining title and loan documents are signed to officially purchase and finance the home. Funds also change hands.

5. Mortgage funding

With documents signed, the lender wires remaining purchase funds to the title company, or approves the release of previously wired funds.

6. Deed recording

The title company files the property deed at county offices reflecting transfer of legal ownership to the buyer. This completes the sale.

7. Possession and keys

Per previous agreement with sellers, either at closing or shortly after, buyers take possession of the home and obtains keys, including garage door openers, mailbox keys, alarm codes, and all other items required for access to the property.

8. Servicing transfer

The buyer’s first mortgage payment usually isn’t due for 30-60 days. During this time loan servicing may be transferred from the lender to an assigned loan servicer. Details on making payments will be provided.

Learn more about

While still a whirlwind of coordinating tasks, the remainder of the transaction after appraisal and underwriting approval focuses on completing legal transfer of property ownership and occupancy. Keeping constant communication ensures you’ll be prepared for each closing milestone.