What is Conditional Approval?
Conditional approval is a lender's decision to approve a mortgage application subject to satisfying specific conditions, such as providing missing documents or clearing underwriting conditions.
Conditional approval means a lender has reviewed your application and agrees to lend, provided you meet certain conditions. These conditions often include providing pay stubs, bank statements, explanations for credit inquiries, or a satisfactory appraisal. Borrowers receive a list of conditions from underwriting and must clear them before final approval. Watch for conditions that are vague or seem excessive; ask for clarification. Also, avoid making financial changes, like new credit or job changes, during this period. Once all conditions are met, the loan moves to clear-to-close. Conditional approval is not a final commitment; failure to meet conditions can result in denial.
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