WHAT ARE LOAN CONDITIONS

WHAT ARE LOAN CONDITIONS?

When things called “loan conditions” are tagged onto your approval, they mean that your loan is approved “conditionally.” For example: “Your loan is approved with these two conditions: Bring your most recent paycheck to closing and provide me with your complete divorce decree to show that you don’t pay any child support each month,” or “Provide evidence of insurance coverage for the new property.”

If you meet the conditions, then your loan is approved and your loan papers are drawn. In all my years of doing loans, I can recall only a few loans going to underwriting without some sort of condition attached. It’s almost as if underwriters have to put a condition on a loan just to prove that they actually looked at the file.

But this process can really add to the tension of the mortgage approval process. I know that you got prequalified with your loan officer and she kept nodding her head and smiling at you, saying, “Don’t worry, you’ll be fine,” but until you hear that final word, “Congratulations,” you’re still waiting. And waiting.

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