Understanding the Mortgage Approval Process and Conditional Approval

Published on April 24th, 2017

You’ve been pre-qualified, filled out the mortgage application, submitted all of your initial documents and discussed your situation with your vLoan officer. Now, you wait for approval.

The underwriter will respond to your application with one of four possible answers: approval, conditional approval, suspended or denied. Most common: conditional approval.

A conditional approval means you’ll need to satisfy remaining conditions prescribed by the underwriter to turn that conditional into a final loan approval. Conditions could include explanations or corrections of anomalies, alternative and supplementary documentation, verifications and attestations.

Take a look at what these conditions mean and how to prepare for responding to your conditional approval – and where you go from there:

Explanation & Correction of Anomalies

Be prepared to offer explanation of wages, tax statements, job gaps, pay stubs, etc. from payroll departments or authorities. You must also explain or correct inconsistencies in credit reports.

Alternative & Supplementary Documentation

If you’re self-employed you may need to provide profit and loss statements prepared by a licensed CPA (Certified Public Accountant). If you lack credit trade lines, service accounts, such as cable or utilities, may be acceptable. You must also supply updated account statements prior to closing.

Verifications & Attestations

You may be asked to verify housing or rental history, employment, income and gift funds.

Closing & Final Approval

Once your loan has been approved, then you’ll receive a call from your loan officer saying you’re approved. You’ll receive a closing disclosure you’ll have to electronically sign. Once you sign, wait three days and then we’ll schedule a final closing date. Once you’ve hit final approval, there are no other step you need to take.

We hope these tips have helped you better understand how to address a conditional approval of your mortgage application. If you have questions or would like guidance with your approval process, contact a knowledgeable vLoan mortgage advisor today.

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