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Old 05-06-2013, 09:44 AM
 
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We're currently in underwriting for our first house (FHA, in NY). I've been hearing some conflicting information as to what comes next.

Assuming the underwriter is agreeable, should we expect a loan committment letter, or a straight up loan approval? I'm not entirely sure what the difference is.

Just to be clear about what I'm asking, here's a timeline of where we are in the process:

Met with loan officer and got a pre-approval --> Searched for homes for about 2 months with my realtor --> Found the house, put in an offer, and it was accepted --> Had the home inspected, clean bill of health --> Had contracts drawn up by the lawyers, signed by us and the seller with terms we agreed upon --> Gave down payment to be held in escrow --> Met with loan officer to sign all loan disclosure paperwork and provide most up-to-date paystubs, statements, etc. --> Lender ordered home appraisal, came back at the purchase price --> Again provided up-to-date docs via email --> Loan processor informed me that she has completed our loan package to now present to the underwriter --> Now...
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Old 05-06-2013, 10:18 AM
 
Location: US
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What will happen now is the underwriter should approve your loan with conditions within a few days. Your loan officer will then work on all the conditions, so you will be clear to close. An example loan condition would be obtaining a VOE (verification of employment). This takes the most time in the loan process.
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Old 05-06-2013, 10:26 AM
 
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Quote:
Originally Posted by bmw335xi View Post
What will happen now is the underwriter should approve your loan with conditions within a few days. Your loan officer will then work on all the conditions, so you will be clear to close.
So is the "loan commitment" just a conditional approval which would be followed by a final approval assuming those conditions are met?
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Old 05-06-2013, 10:28 AM
 
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Quote:
Originally Posted by bmw335xi View Post
An example loan condition would be obtaining a VOE (verification of employment). This takes the most time in the loan process.
This has already been done.
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Old 05-06-2013, 10:34 AM
 
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Again, fewer and fewer lenders issue actual Commitment Letters any more. There is too much danger of legal exposure. Lots of banks, and brokers, have Final Review of ALL of the conditions, and THEN the file goes to a Compliance officer for another once-over, and then sometimes it even goes to the investor for review, then they draw closing docs.

There is usually zero time between true Final Approval and Doc Draw. Your closing documents, to wit, are the Commitment.

I don't know everything about all banks, but I also don't know of any banks issuing true, binding Commitment Letters today.
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Old 05-06-2013, 10:40 AM
 
Location: US
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Quote:
Originally Posted by CuriousGeorge13 View Post
So is the "loan commitment" just a conditional approval which would be followed by a final approval assuming those conditions are met?
It is a legally binding and formal document from the lender basically saying your loan has been approved based on these conditions. Once the loan officer clears all these conditions, he/she will send them to the lender and their underwriter will go over them and if everything is there, your loan will be clear to close, docs can be ordered, the notary can be scheduled etc.

So, your loan has been approved, but all the conditions need to be satisfied before you can close.

Let me know if this makes sense.
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Old 05-06-2013, 10:43 AM
 
Location: US
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Quote:
Originally Posted by CuriousGeorge13 View Post
This has already been done.
I just realized I might have been a bit confusing when I said, "this takes the most time in the loan process." I didn't specifically mean the VOE, I meant clearing all the conditions.
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Old 05-22-2013, 01:41 PM
 
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Update: We received our Loan Commitment two days ago!
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Old 06-06-2013, 10:12 AM
 
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Update: Cleared to close!
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Old 06-10-2013, 11:28 AM
 
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Jealous! Got our comitment letter same day as you. Waiting on our clear to close!
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