Is a mortgage commitment the final clearance to close?

No. A mortgage commitment is the lender's conditional approval of the borrower, issued on conditions, and it is not the final clearance to close. After it issues, the conditions on the letter still have to be satisfied, the building itself still has to pass the lender's project review, and the closing disclosure, the title work, the insurance binder and the funding conditions still have to clear in sequence. Two approvals run in a condo purchase, one on the borrower and one on the project, and the commitment speaks mainly to the first. The project side is read in can a new Miami condo building fail the lender's review, and what then. None of this is advice; it is the mechanics, and the list a buyer takes to the lender and to counsel.

A commitment is a letter that says the lender will lend, on stated conditions, by a stated date. It follows the application and the first review of the borrower's file: income, assets, credit and the home's contract, each checked against the documents the borrower supplied. The letter names what remains open. Some conditions are the borrower's to satisfy, some are the property's, and some are the building's, and the letter does not always sort them into those piles clearly. A buyer reads the conditions list as the real document and the approval sentence as its heading. How a financed purchase is framed from the start is set out in can a foreign buyer get a mortgage in Miami and in cash or mortgage for Miami pre-construction.

The commonest reading error after a commitment issues is to treat a document as cleared because it was sent. The lender's file moves each item through three states: received, reviewed, and any issue in it resolved. A bank statement can sit received and unreviewed while the file looks complete from the buyer's side. An appraisal can be reviewed and still open, if the reviewer raises a condition the appraiser has to answer. A title commitment can be in hand while an exception in it is still being worked on. The buyer's practical question, asked in writing until closing, is not whether an item was sent but which of the three states it sits in, and who owns the next step on it.

A condominium purchase carries a review no house purchase does. Beside the borrower, the lender reviews the project: the association's budget and reserves, the share of homes sold and closed, any litigation, the insurance on the building, and the character of the program, including whether a hotel sits inside the tower and how the residences are separated from it. That review can fail a building a strong borrower wants to buy in, and it often runs late, because a new building's file is only complete near closing, when the declaration is recorded and the first budget is real. The delayed calendar is its own problem, read in what happens to your mortgage when a Miami pre-construction closing is delayed. A commitment on the borrower says nothing final about this second approval, and a buyer who holds the first should ask, in terms, where the second stands.

The usual post-commitment sequence, stated as lenders run it. The final appraisal, on the finished home, has to be received, reviewed and accepted. Title has to be searched and the title commitment's exceptions worked through. The insurance binder for the buyer's own policy has to be issued and accepted, against the master policy the association carries. The condominium project review has to be completed on the building's final documents. The closing disclosure has to be issued and its waiting period has to run before the closing can happen. And the funding conditions, the lender's last check that nothing material has changed in the borrower's file since the commitment, have to be satisfied before the money moves. Which papers gather at the end of that sequence is set out in which documents should I get before closing on a new Miami condo.

Four questions, in order, all of them mechanics. Which conditions on my commitment are still open, and for each one, is the item received, reviewed or resolved? Where does the project review of this building stand, and what in the building's file could still stop it? What expires first, the commitment itself or any lock or approval inside it, if the developer's closing date moves? And if a condition cannot be satisfied, what does the purchase agreement say follows, asked of counsel with the contract in hand, because pre-construction agreements commonly carry no financing contingency and the deposit position turns on that clause. The lender owns the loan decisions. Counsel owns the contract decisions. The desk holds the building side of the calendar. Every other buyer question is collected in the questions buyers ask.

Mechanics as carried on the site's published canon: can a new Miami condo building fail the lender's review, mortgage when a Miami pre-construction closing is delayed, documents before closing on a new Miami condo, can a foreign buyer get a mortgage in Miami, and cash or mortgage for Miami pre-construction. No lender, rate or product is named, and no figure is printed. Compiled by the desk at Miami Dossier.