Introduction

A conditional approval is a positive step: the lender has reviewed most of your file and is prepared to move forward if you complete certain items. Treat it as an action list, not a final yes. In my 15 years in lending, borrowers who respond quickly and stay organized convert conditionals to closings with far fewer problems.

What commonly causes a conditional approval?

  • Missing or outdated documentation (pay stubs, bank statements, tax returns).
  • Verification of employment (VOE) delays or job changes.
  • Appraisal issues or an appraisal gap between sale price and appraised value.
  • Title problems or outstanding liens that need clearing.
  • Automated underwriting flags (income calculation, DTI, credit disputes).

Typical lender conditions (what you may be asked for)

  • Recent pay stubs, W-2s, or a signed tax return (for self-employed, profit-and-loss statements and 1099s).
  • Bank statements and proof of funds for closing costs and reserves.
  • A satisfactory appraisal and repairs or clarifications from the appraiser.
  • A clear title report and any lien payoff statements.
  • Explanations for large deposits, credit inquiries, or disputed credit items.

Immediate next steps — practical checklist

  1. Read the conditions carefully. Note deadlines and contact names.
  2. Create a single, clearly labeled folder (digital and/or physical) with each requested document.
  3. Prioritize time-sensitive items: employment verifications, appraisal issues, or title defects.
  4. Provide signed authorizations quickly (e.g., for a re-verification of employment).
  5. Avoid any major financial moves: do not open new accounts, co-sign loans, make large purchases, or change jobs.
  6. If self-employed, work with your CPA to supply organized tax docs and year‑to‑date profit-and-loss statements (see internal resource on how underwriters treat self‑employment income).

Communication and timing

  • Ask your loan officer for an expected timeline and a single point of contact. Most condition packages resolve in days to a few weeks, but complex items (title, appraisal repairs, condo docs) can take longer.
  • Confirm receipt of every document and ask for status updates when a condition is marked as received but not cleared.

Common mistakes that slow or kill approvals

  • Providing incomplete evidence (e.g., screenshots instead of original statements).
  • Ignoring small administrative items like missing signatures or unsigned disclosures.
  • Making financial changes during underwriting (new credit pulls, large deposits without explanation).

When to bring in help

  • If conditions involve complex tax returns, undisclosed business income, or title disputes, consult a CPA, mortgage broker, or real estate attorney. Professional letters (CPA, employer, or attorney) often resolve lender concerns faster.

Short example

A client with conditional approval because of a low appraised value obtained a second comparables report and negotiated a seller credit to cover the gap; after the lender accepted the explanation and adjusted the underwriting, they received a clear-to-close within two weeks.

Helpful resources (authoritative and internal links)

Final tips and professional disclaimer

Respond promptly, keep records of every submission, and maintain stable finances until closing paperwork is signed. If a condition feels unclear, ask your loan officer for a brief written explanation so you can supply precisely what’s needed.

This article is educational and does not replace personalized financial or legal advice. Consult a licensed mortgage professional, CPA, or attorney for guidance tailored to your situation.