What to Expect at Closing
Congratulations! You made it to your closing. Here is how you can prepare for closing day..
The mortgage closing is the last step in the rewarding process of purchasing a home. You worked with us to get pre-approved and you found your dream home. You negotiated over the price, and the seller accepted your offer. If this is your first house, or if you haven’t bought a home in the past decade, knowing what to expect can make the difference between an enjoyable home buying experience, and a stressful one.
The closing is also the last chance you will have to take advantage of any negotiating power. Make sure you are not hesitant to ask questions and work with your real estate agent about any concerns you may have in the last steps of purchasing a home. Your real estate agent will schedule a final walk through with you. During the walk through you will be checking for any new damage to the property or confirming needed renovations have been completed.
What is a Mortgage Closing
Real Estate closings involve the final performance of all agreements made between the buyer, the seller, and the lender for the purchase and financing of your home. Signing the closing documents legally transfers ownership from the seller, and you become the new property owner.
Who Attends a Loan Closing?
Each state has its own unique closing process, which can involve a variety of industry professionals. For example, attorneys for both parties in the transaction may be required to attend the closing depending on the laws of the state where the property is located.
But in general, the people you can expect to see at the closing — aside from yourself, the seller your respective real estate agents and your loan officer — are a representative from the title company and the closing agent. This individual’s duty is to finalize the settlement, see to it that all documents are reviewed and signed, and that closing fees and escrow are properly managed.
What Should You Bring to The Closing?
Speak to your lender about the complete list of the specific items you’ll need, but a typical closing day requires you to bring:
- A government approved photo I.D. (a driver’s license should be sufficient).
- A certified cashier’s check for the full closing cost amount owed (depending on the state, you can also wire money to the title company).
- Any documents that have yet to be received by the mortgage or title company (touch base with your lender and real estate agent about this prior to closing so there are no surprises).
What Will You Sign at Your Closing?
You’ll definitely have a stack of papers to sign on your closing day, which is to be expected with such a major purchase. These are some of the documents that will require your signature:
- The Closing Disclosure form provides details about your home loan including terms and all closing costs. Buyers usually receive this document prior to the actual closing.
- The escrow document provides information on any payments your lender will make on your behalf during the first year of the note.
- Your mortgage document reflects your promise to repay the full amount and accruing interest of the loan.
- The deed is used to secure the loan and instill rights with the lender in the event of loan default.
- The occupancy certificate is generally reserved for new, previously unoccupied homes certifying they meet building and fire codes.
In addition to signing documents, you will also take care of a few other items.
Buying a home involves a variety of costs. For the buyer these costs may include, “Prepaid Items”. These are not loan fees. “Prepaid Items” include property taxes homeowners insurance, and per diem interest. The Closing Agent/Attorney will review the final Closing Disclosure to ensure all numbers that were originally disclosed are as they should be at the closing.
Transfer of Funds
The amount of money needed for closing is typically communicated from your lender a day or two in advance of the loan closing. Closing finds cannot be in the form of cash or a personal check. Wired funds or cashiers checks are generally the only acceptable forms of payment received. Your lender or closing agent will verify this information with you prior to closing.
Recording Public Documents
After signing the closing documents and paying the closing costs/down payment, you now have ownership of the property. THe seller must publicly transfer the property to you by way of recording documents. The closing attorney or title agent will then record the deed.
You get your keys and you are now officially a homeowner!
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