Clear To Close
When a buyer is borrowing money to buy a home in New York, the final step usually involves the lender identifying the transaction as “clear to close,” or “CTC,” for short. It’s an important part of the process because, until the lender is ready to write that big check, the actual closing itself cannot occur.
How do you get to the stage where your lender has issued the clear to close? The buyer/borrower must first satisfy all of the conditions and the lender is now ready to issue the funds needed to buy the home. The conditions commonly include initial document review, underwriting, appraisal of the property, verification of employment, a final credit check, etc.
Even when a buyer/borrower is under the impression that he or she has satisfied all of the lender’s requests in order to receive a clear to close, lenders will commonly issue a few last minute requests. Such requests usually include an overlooked affidavit or comparable document that needs to be signed and notarized by one party or the other.
Lenders require as much documentation as they do because they are in the business of making money. And I don’t say to put lenders in a negative light. To the contrary, the amount of risk lenders assume when making loans in excess of six figures is substantial, hence the need for the amount of information they demand in order to approve a loan.
However, the question commonly arises as to why home sellers often seek out all-cash buyers, meaning buyers who do not require a loan to buy a home. When a buyer can provide proof of funds showing they have sufficient resources to pay cash for a home, all of the requirements associated with a loan go away: underwriting, appraisals, employment verification, credit checks, etc., as does the time required with getting to a point where the transaction is cleared to close.
Either way, it’s important for all parties to work together to reach the stage where the lender has cleared the transaction to close so the seller can sell and the buyer can buy.
Give us a ring or email us and let’s talk about how we can help you buy or sell your next home.