The Home Closing Process

The Home Closing ProcessKnowing what to expect brings peace of mind. 

I will provide you with the support you need during the home closing process; working closely with Escrow to make sure you have received the proper documentation and you are advised of pending dead-lines well before the fact. I will also coordinate a final property walk-through.

To help you better understand “The Home Closing Process“, I have assembled information from credible sources and placed it areas of information  so you can choose among areas that you want to explore at greater depth.

Steps in Closing on Your Home is one of three tabs that also include, How Long Does a Home Closing Take?, and What Problems Can Take Place?  

The balance of the answers are in a Frequently Asked Questions format.

As you read documents your are likely to come across words that are unfamiliar to you. Use my page on Loan Terminology for definitions 

 

Its closing day, time to sign the papers officially sealing the purchase.

[faq title=””]

[faq_question]What Should I Do To Prepare for Closing Day?[/faq_question][faq_answer]The day before closing, be sure to gather all the paperwork you have received throughout the home-buying process: good-faith estimate, contract, proof of title search and insurance if necessary, flood certification, proof of homeowners insurance and mortgage insurance, home appraisal and inspection reports. You might need to refer to these documents at closing. Most home-sale contracts entitle you to a walk-through inspection of the property 24 hours before closing. This is to ensure that the seller has vacated the property and left it in the condition specified in the sales contract.

Original Source: Realtor.com

[/faq_answer]

[faq_question]Do You Have Any Useful Tips?[/faq_question][faq_answer]The closing process can be stressful because of all the paperwork you will need to sign. Just remember these few tips:

 Avoid feeling rushed by reading all the documents that will be sent to you prior to this meeting.

 Most people ask a lot of questions about the legal terminology in closing documents. Don’t be afraid to ask as many questions as you need to ensure that you clearly understand the process and the paperwork.

 The documents in the mortgage process are the same for everybody, regardless of ethnic origin, language, gender, or income. Federal law requires that you sign English language versions of all forms as your final, legally binding contract.

SOURCE: Freddie Mac, Your Step-by-Step Mortgage Guide

[/faq_answer]

[faq_question]What is my Participation at Closing?[/faq_question][faq_answer]At closing, your participation will be twofold:

Sign legal documents.This falls into two categories:

  1. The agreement between you and your lender regarding the terms and conditions of the mortgage and the agreement between you and the seller transferring ownership of the property.Be sure to read all documents carefully before signing them, and do not sign forms with blank lines or spaces.

  2.  Pay closing costs and escrow items.Borrowers handle the numerous fees associated with obtaining a mortgage and transferring property ownership in one of two ways: they either roll them into the principal balance of the new loan or agree to pay higher interest rates and have their lenders foot the bill. Some buyers may have to pay these out-of-pocket fees.

Original Source: Realtor.com

[/faq_answer]

[faq_question]What Documents will I Be Signing?[/faq_question][faq_answer]

Closing documents

HUD-1 settlement statement: A detailed list of all costs related to the sale of the home. It is similar to the good-faith estimate you got weeks earlier, but the HUD-1 is not an estimate; it is a precise record of the settlement costs. Both you and the seller sign it. Compare the HUD-1 statement against the good-faith estimate to see if the actual closing costs differ significantly. By law, you have the right to review the HUD-1 24 hours before closing. Do so. Clear up any mistakes and resolve problems.

Final TILA statement: You received the first version of this statement after applying for your mortgage. This final version outlines the cost of your loan and APR and takes into account any modifications made to your rate and points between application and closing. Make sure that everything is in order.

Mortgage note: This document states your promise to repay the mortgage. It indicates the amount and terms of the loan, and what the lender can do if you fail to make payments.

Mortgage or deed of trust: This document secures the note and gives your lender a claim against the home if you fail to live up to the terms of the mortgage note. Certificate of occupancy: If you are buying a newly constructed house, you need this legal document to move in.

Once you’ve reviewed and signed all closing documents, the house keys are yours and you will have successfully bought your new home!

Original Source: Realtor.com

[/faq_answer]

 

[faq_question]Can You Give Me More Details  About The Documents I Will Be Signing?[/faq_question][faq_answer]

Here’s a little more detail about some of the paperwork you’ll be asked to sign at your closing. Remember, every person who buys a home has to sign this paper- work, no matter the country of origin, income level, or native language.

The Mortgage Note

The mortgage note is a legal document that provides evidence of your indebtedness and your formal promise to repay the mortgage loan, according to the terms you’ve agreed to. These terms include the amount you owe, the interest rate of the mortgage loan, the dates when the payments are to be made, the length of time for repayment, and the place where the payments are to be sent. The note also explains the consequences of failing to make your monthly mortgage payments.

The Mortgage or Deed of Trust

The mortgage or deed of trust is the security instrument that you give to the lender that protects the lender’s interest in your property. When you sign the mortgage or the deed of trust (depending on the state where you live), you are giving the lender the right to take the property by foreclosure if you fail to pay your mortgage according to the terms you’ve agreed to. Financing a house is very similar to financing an automobile; in both cases the property is the security for the loan.

The mortgage or deed of trust states most of the infor- mation contained in the note. It also establishes your responsibility to keep the house in good repair, insure it, and make your payments on time.

The Deed

A deed is a document that transfers ownership of the property to you. It contains the names of the previous and new owners and a legal description of the property, and is signed by the person transferring the property. The deed gives you title to the property, but the title is conveyed to a neutral third party (called a trustee) until you pay the mortgage loan in full.

The closing agent will be responsible for recording this document so that it can be filed as part of your county’s public records. You will receive a copy at closing and another copy after it has been recorded.

Affidavits and Declarations

Affidavits and declarations are statements declaring something to be true, like the fact that the property
will be your principal place of residence or that all the repairs needed on the property were completed prior to closing. In most cases you’ll have to sign one or more affidavits at your closing. 

SOURCE: Freddie Mac, Your Step-by-Step Mortgage Guide

[/faq_answer][/faq]

Closing on You HomeClick on the image to the left to view videos 

 

no replies

Leave your comment