subject: Real Estate: Home Closing Process [print this page] If you know ahead of time what to expect in the closing process you will be more at ease during the process. Closing day is the big day when you will officially own your property after weeks or even months of paperwork and possibly a lot of stress as well. Closing day is your very last chance to make any changes to the agreement.
A lot of paperwork is needed when you are closing on the property. It is your best bet if you get all these documents gathered ahead of time such as the night before. This way you won't be scrambling before the appointment to make sure everything is where it should be. Some of these include the good-faith estimate, a contract, proof of title search and any insurance that is needed, proof of both mortgage insurance and homeowners insurance if required, the appraisal on the home, and any inspections that were conducted on the home. They may be referenced during closing.
A walk through of the property is typically allowed 24 hours before you officially close to make sure that no major modifications have been made to the property and to be certain that the previous inhabitants have left. Major problems need to be fixed before the closing occurs so the date may need to get delayed. Another option is for the money to be set aside for the repairs before all closing paperwork is signed in escrow.
There are two different things that you will do at the closing appointment. The first is to pay any escrow and closing costs. You are responsible for fees that may have incurred to transfer the property to you. Some people pay these at closing up front while others get these costs put directly into the principle balance. Usually this requires a higher interest rate. You will also sign all the legal paperwork that comes with obtaining the property. The seller signs the property over to your officially and you also sign your contract with the lender who is loaning you the money. Never sign anything without reading it completely.
A number of people will be present at the closing appointment. The home seller of course will be there, you will be there, and the lender or mortgagee will definitely be there, the real estate agent for the seller, someone from the title company, a closing agent, and an attorney for both you and the lender as well. The closing agent is in charge and will make sure that the settlement is done completely. This includes making sure the documents are all signed and the closing fees are paid completely.
A few important documents will be included when you complete closing:
HUD-1 Settlement Statement: This gives you a list of all costs that come with selling the home. It is similar to estimates but this gives exact figures that you and the seller sign. You should compare this with your good faith estimate to be sure the numbers match.
Final TILA statement: You receive one of these when you apply for a mortgage. It gives you the cost of your loan and APR along with any possible rate changes or points on the mortgage. Be sure it meets your agreed terms.
Mortgage Note: You sign this one agreeing to pay the mortgage and under what terms you agree to it, along with what can happen if you don't make payments.
Mortgage or deed of trust: This allows the mortgage company to take your home if you don't meet the terms set forth.
Certificate of Occupancy: This is needed if your home is newly built.
After you sign all the papers and get the keys the home is yours. Congratulations!
