Clear to close (CTC) is the moment the underwriter signs off on every condition and the loan is fully approved. Nothing else is owed to underwriting. The lender can now prepare the closing documents, send your Closing Disclosure and book the signing with the title company or closing attorney.
For most buyers, CTC is when the closing date in the contract becomes an appointment with a time and an address.
The steps between CTC and the signing
- The Closing Disclosure goes out. Federal rules require that you receive it at least three business days before you sign. For this rule, business days include Saturdays and exclude Sundays and federal holidays.
- The lender re-verifies your job. Fannie Mae requires a verbal verification of employment no more than 10 business days before the note date, and FHA lenders run a similar check.
- The title company prepares the settlement. It collects payoff figures, tax prorations and the wiring instructions for your funds.
- You move your cash. The amount on the Closing Disclosure is wired or brought as a cashier's check.
Three changes after you receive the Closing Disclosure restart the three-day wait: an APR that becomes inaccurate, a change in loan product, or an added prepayment penalty. Most other changes, such as a small fee adjustment, get a corrected disclosure without a new wait.
Working out the closing check
The Closing Disclosure's "Cash to Close" line already subtracts your deposit and credits. Here's how a $300,000 FHA purchase gets there:
| Item | Amount |
|---|---|
| Down payment, 3.5% | $10,500 |
| Closing costs and prepaids | $12,400 |
| Seller credit | minus $9,000 |
| Earnest money already paid | minus $3,000 |
| Cash to close | $10,900 |
Check the math yourself: $10,500 plus $12,400 is $22,900. Subtract the $9,000 seller credit and the $3,000 deposit, and $10,900 is left. If your own figure doesn't match the form, ask the loan officer before closing day.
Protecting the closing after CTC
Hold steady until the keys are in your hand. Don't open credit cards, finance furniture, switch jobs or move money between accounts without telling your loan officer.
Wire fraud is the other risk. Criminals send fake emails that look like they came from the title company, with new wiring instructions. Before you wire, call the title company at a phone number you found on your own, such as one from your contract, and confirm the account details by voice. A real title company never changes wiring instructions by email at the last minute.
The cash to close calculator lets you check the closing figure before the Closing Disclosure arrives. If anything on the final numbers looks off, call AAA Capital Funding at 888-601-8344 and we'll go line by line with you.