It seems as if there has been a lot of confusion around Clear To Close (CTC). Just to be clear, there is no official CTC timing within the loan process. A typical files goes like this (at least in California):
Pre-approval (preferrably w/ AUS approval) >> offer accepted >> official loan application submitted >> initial disclosures (w/ LE) sent to buyer >> file to processing >> file to underwriting >> underwriting approval (w/ or w/o conditions) >> Closing Dosclosure (CD) sent to buyer >> closing docs sent to title company >> 3 day waiting period before buyer can sign closing docs >> buyers sign closing docs >> loan funds >> loan records >> buyer gets keys >> everyone can stop pulling their hair out (and yes, this is when you can go finance your new Ferrari)
The CTC is simply information that the LO is passing on to the buyer letting them know, “Hey, your loan is actually going to close… for real.” I typically tell my clients they are CTC once we have met every condition from UW and we have full loan approval. The reason a CTC may be issued at different points along the process is because UW conditions are sometimes moved “prior to funding” if they are not of critical importance. This means that UW is okay with a CD being issued and closing docs going to title, as long as the prior to funding condition(s) are taken care of before the loan funds. With this being said, you technically do not have full loan approval even though you have a CD and your closing docs are at the title company. To add to the confusion, some companies will not let the CD go out without a CTC, but many will.
To sum up this mumbo jumbo, a CTC is an LO letting the buyer know, “We got this,” but this point in time can be different from loan to loan.