Conditional approval: what it means and what comes next

What conditional approval actually is

After you're under contract, your loan file goes to underwriting. The underwriter reviews your credit, income, assets, and the property, then issues one of three decisions:

1. Approved (rare on first review): No further documentation needed. 2. Conditional approval (most common): Yes, but here are 5–15 items we need to see or verify. 3. Suspended or denied: The file has a fundamental issue that must be resolved or the loan can't proceed.

Conditional approval is a good sign. The underwriter has looked at your file and said 'this works if we get these documents.'

Common conditions and how to clear them

Prior-to-doc conditions (must clear before final loan docs): - Updated bank statement covering the latest 30 days - Explanation of a large deposit - Updated pay stub within 30 days of closing - Letter of explanation for a credit inquiry - Insurance policy declaration page - Homeowners association master insurance certificate (condos) - Termite inspection or clear WDI report (FHA/VA in some states)

Prior-to-funding conditions: - Final Verification of Employment (usually done 1–3 days before closing) - Final title update - Signed disclosures and closing docs

Respond within 24 hours to every condition. Delays here are the #1 cause of closing pushes.

What NOT to do after conditional approval

Between conditional approval and closing, do NOT:

• Open any new credit (car loan, credit card, store card)
• Make any large deposits without documentation (unexplained $5K+ deposits trigger sourcing questions)
• Change jobs or start a new pay structure
• Pay off collections or old debts without checking with your LO (can re-age them)
• Miss any payment on anything
• Buy furniture on financing — happens all the time, kills more closings than any other single mistake

Lenders re-pull credit and re-verify employment within days of closing. Any surprises here can suspend or cancel your approval.