CLOSING ON YOUR PURCHASE:
Closing is the proverbial "signing on the dotted line:" The process will put the title to the house in your name, verify homeowners' insurance on the property, commit in writing to the terms of the mortgage, and usually, put the keys to the house in your hands. In general, you will leave the closing and go to your new home as a homeowner. The weeks and months of anticipation are all settled in the short amount of time that you spend at the closing.
Once you’ve made an offer and it’s been accepted, a closing date will be set up. The closing date is set when your mortgage is approved and you sign a commitment letter with your lender. Make sure the closing date is before your lock-in rate expires.
A number of people attend closing. They usually include:
* You, the homebuyer.
* The seller of the home (though not always at the same time).
* The closing agent, the title insurance representative, and the escrow agent. (These can be several different people or one person handling all three issues. Closing agents coordinate the closing by recording closing documents, dispersing funds, etc.)
* The real estate agent.
What should I do before and at closing?
Review the documents.
Ask for the closing documents before the actual closing and read them carefully. It may be a good idea to have a lawyer review them with you. Understand what you'll be asked to sign before the meeting.
Understand the closing costs.
Closing costs can include many different things and can add up to a sizeable amount of money. Be prepared. Know exactly what's included in your closing costs and the total amount you'll be expected to pay at the closing meeting. Your lender should clearly explain all closing costs. Find out in advance if checks will be accepted or if your lender must supply a cashier’s check.
Attend the closing meeting.
Closing meetings are standard in the home buying process, although there are a few states where there are no closing meetings. You'll sign documents like the closing statement, mortgage note, and truth-in-lending statement. Proof of insurance and inspections as well any monies due are required before you get the keys to your new home.
The following are the most important items that you will need prior to or at closing and some hints regarding them:
A Closing cost estimate: This should first be given to you by your Agent at the time of the contract, and then given to you by the Lender, a Good Faith Estimate, shortly after the application for the loan. This should give you a reasonably close estimate of funds you will need at the time of closing.
Homeowners' Insurance Policy: This must be secured prior to the date of closing. For more information on coverages (and saving money) see the Homeowners' Insurance section.
Settlement Statement: You should have a copy of the Settlement Statement before the date of Closing. Generally this will not be available until one or two days prior to the actual Closing, but it is important to have it because it gives you the total amount of cash you will need at Closing and also how those various funds will be dispersed. In addition, it gives you an opportunity to iron out any discrepancies prior to sitting down at the Closing table. Your Agent should also have a copy for review.
Certified Funds: On the day of Closing you will need certified funds for closing costs and down payments. This is an important reason for needing a copy of the Settlement Statement a day or two in advance--so you know the amount of funds needed and so that any problems can be handled in advance.
By making adequate preparations in advance, you will be far less likely to have nasty surprises when everyone (especially you!) is ready for closing.