So, you’ve submitted your Loan Application, gathered your financial documents, and things seem to be moving forward. Then your Loan Team mentions you’ve received a Conditional Approval. It is an exciting milestone in your homebuying journey, but it doesn’t mean you’re at the finish line just yet!
What Is a Conditional Approval?
A Conditional Approval means your loan has passed an initial underwriting review and is on its way to a Verified Approval, but certain conditions still need to be met before the loan can be officially approved. Think of this as if you’re on-track and proceeding forward, but you still have a few to-dos left on your checklist before you’ve received your Verified Credit Approval.
These conditions may include, but are not limited to:
- Providing updated pay stubs or bank statements
- Providing additional documentation to clarify income, assets or employment
- Needing an appraisal or title work
- Needing proof of homeowner’s insurance
- Or any other items your Underwriter may need to verify!
Once all the conditions are submitted, your documents will be reviewed and you’ll receive your final Loan Approval, if you qualify. (This is also known as being clear-to-close!) Please note that having a Conditional Loan Approval does not guarantee that your loan will be approved. There may be additional conditions that need to be cleared, or you may not qualify for a loan.
Why Do I Need to Resubmit Documents?
It’s completely normal to be asked for updated documents throughout the financing process, especially when purchasing a new construction home. Here are some reasons why:
- Documents expire. Unlike buying an existing home, building a new home takes more time and certain documents, like bank statements and pay stubs, are only valid for a certain period of time.
- To verify nothing has changed. Lenders will want to update documents to confirm that your financial situation has remained consistent leading up to your home’s closing. As a reminder, you’ll want to hold-off from making any large purchases or changes to your employment or credit profile during the financing process. And if something does change, like if you receive a raise or change companies, you’ll want to notify your Loan Team ASAP.
- Regulatory requirements. Mortgage lending is heavily regulated, so lenders are often required to be very thorough throughout the lending process.
We know it can feel repetitive, but every request helps ensure your loan can be finalized smoothly and on time!
How Is This Different from a Pre-Approval?
Prior to beginning the Loan Application process, many homebuyers may seek to obtain a Pre-Approval. A Pre-Approval is preliminary indication that you may be financially qualified for a home loan based on a review of your credit history, income, assets, and debts. A Pre-Approval is not an immediate approval and may not mean that you are ultimately approved for a loan, but it can help you shop for a home with confidence!
A Conditional Approval is part of the actual Loan Application process and is a sign that you’re getting closer to Loan Approval and closing on your new dream home! (If you qualify.) Just keep in mind that a few final conditions will need to be met before your loan is officially approved. Stay responsive to your Loan Team, and don’t worry if you’re asked to resubmit documents along the way. It’s all part of the process and ensuring a secure and successful homebuying experience!
Still have questions? Your Pulte Mortgage Loan Team is here to help!
