What does ‘ready for docs’ mean? It’s actually a phrase that identifies a specific stage in the mortgage loan approval process, and one that consumers and loan officers alike appreciate. Being ready for docs means that the initial loan approval process has been completed and now the loan file is ready to have the loan papers delivered to the settlement agent. Just one of several phrases in the loan process.

A mortgage loan prequalification means that, generally speaking and after a conversation with a loan officer, the applicants get a pretty good idea on how much they might qualify for. A preapproval means the loan has moved on to the next stage after the credit documents in the loan file have been third-party verified. How’s the credit? It’s the credit report that identifies that. 

This is an example of third party verification. Income? Paycheck stubs, W2s and tax returns can fill in here. Employment? A phone call to the employer or the company fills out a Verification of Employment form.

When a loan application is first submitted to a lender the application is run through an automated underwriting system. This simple and quick process provides the lender with a road map as to what is needed in order to get the loan in line for a full approval. Initially, there are ‘pre=-doc’ conditions for an approval. This stage essentially says, ‘okay, provide me with these things and then we can move on to the next stage. Once these things are submitted, reviewed and approved by the lender, this is where the ‘ready for docs’ comes onto the stage.

This means the loan has received the initial conditional approval and loan papers (documents) can be printed and delivered. Here, borrowers can review the initial and then the final settlement statement that tells everyone who owes what to various third parties such as the title company, attorney and others.

After the final settlement statement is approved by all parties, the buyers and sellers can then sign their respective closing documents. From here, the loan goes into a funding status. Sometimes though there are some final conditions that have to be met. These are ‘prior to funding’ conditions and are relatively harmless such as an updated paycheck stub or a  more recent bank statement. But none of this gets to this point without the loan file receiving the ‘ready for docs’ stage.