What Does Conditional Loan Approval Mean? Getting full loan approval is a process. When you have “conditional” loan approval, you’re almost there.

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So what does conditional loan approval mean? We’re going to find out when we come back. Hey everybody, welcome to my channel. I am Phoenix real estate agent John Cunningham with eXp Realty and everything like clockwork. I’m right here on Youtube answering your real estate questions. So if you’re on the move, if you’re looking to sell or you’re looking to buy, do yourself a solid hit, that subscribe button, hit the notification bell. That way you’ll be in the know and I’ll make sure to send you my videos each Thursday when I get them completed.

Loan Approval with Conditions

So conditional loan approval means that you’re approved with conditions. So here’s what’s happened so far. You’ve gotten prequalified, you’ve gotten pre-approved, the lender has taken all your information and gone through their own checklist and they believe that they’ve got a good packet put together and they’re submitting that to the underwriting department. The underwriter is going to look at the file and they’re there to make sure that everything is right and nothing’s missing.

Documentation Overcomes Conditions

And it’s very common for them to request additional documentation. So at that point, you’re approved with conditions. So they might have two or three things that they want you to add to. So when does this happen? It always happens at the most inconvenient time possible. Imagine this, just picture this for a second. All your stuff’s in boxes. Yup. You’re getting ready to turn your utilities off in a week. You’ve got your, you haul truck packed up and you get a call from your processor, your loan processor, and they tell you that the underwriter wants some stuff and it just seems so ridiculous, right? They want a copy of some check that cleared six weeks ago and it’s right there on the bank statement. But you know what, just calm down, pause, hit the brakes a little bit. You got to think about it like this. You’re not buying a pair of shoes and the underwriter is there as a safety net for the bank.

Conditional Loan Approval – Why Lenders Use it

They just want to make sure that they’re making a wise investment. They want to make sure you’re not some drug dealer or something. So they’re going to look into you financially, make sure you’re solid, make sure everything’s legit. So they might ask for the copy of a check front and back that shows them where it was from and what it was for and who signed it. They might ask for two or three other things, and once you submit it all that information to them and they’ve agreed that the file is complete, then you’re not in conditional loan approval status anymore.

Full Loan Approval Status

At that point, you’re fully approved. So now you know what conditional loan approval means and you’re in a really good position if you’ve got the mindset that you’re just going to push through and follow these steps. Now, before you go, make sure to check out the link to the next video below selling a home without building permits. This is a really interesting topic. It happens a lot more frequently than you can imagine. So check that out. It’s a topic that could affect you, whether you’re a buyer or a seller. And don’t forget to hit the subscribe and notification buttons. That way I can notify you when my next real estate videos out next Thursday. In the meantime, thank you for watching this video. See Ya.

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