What is a Closing?
Buying a house is an exciting time. The more familiar you with what to expect, the more relaxed you’ll be as you go through the process. Closings are described as “gatherings where buyers and sellers get together and sign all of the documents required to formally sell a home and transfer its title to the new owner. Unless the buyer is paying cash for the property, the closing is also where the purchaser will sign documents finalizing the mortgage that they're taking out”, by Wisepiggy.com
Before You Get to the Closing:
• To prepare for closing, carefully review all paperwork as soon as you get it. Make sure all the numbers add up and you’re getting what was promised by the loan originator.
• All buyers whose names will appear on the property's title and/or mortgage documents should bring government-issued photo identification.
• You'll also need a cashier's check (or use a wire transfer) to submit any down payment that you're making or fees that you're not rolling into your mortgage.
• Sellers should also bring keys to the house, garage door openers, and any codes to security devices.
• A closing takes time, and patience is the key. Don’t try to close on your lunch hour, which more than likely will not be enough time. It is recommended that you budget half a day for closing (even though you may not need all that time).
• Schedule the closing date around the 20th or 25th of the month, rather than the last day of the month, to allow time to address any last-minute problems.
At Closing:
Final Walk-through. “Buyers are often allowed to do a final walk-through inspection 24 hours before closing to determine if any damage was done to the property between contract and closing, and to negotiate any necessary repairs with the seller,” says Mary Beth Rapice, a real estate attorney for the Pullman & Comley law firm in Bridgeport, Connecticut.
Review of Your Documents. It is important for you to take to the closing table every document received throughout the home buying process, Rapice says. These include the good faith estimate and proof of homeowners insurance.
“It’s always good to bring a copy of your contract, a copy of your inspection reports and any documents that you had delivered to the bank so that they could approve you for the mortgage,” Rapice says.
Several Key Players. While closing practices vary from state to state — and even locality to locality — the following parties are generally present at the closing:
• Home seller.
• Seller’s real estate agent.
• Title company representative.
• Attorney(s): The buyer and lender may have attorneys.
• Closing agent: This person conducts the meeting and makes sure all documents are signed and fees and escrow payments paid.
• Mortgagor (you).
• Mortgagee (lender).
More Documents! During the closing meeting, the seller signs certain documents transferring property ownership. You receive and sign documents related to the mortgage agreement and ownership of the property, and pay any closing costs and escrow payments. These include:
• The settlement statement detailing all of the costs related to the home sale.
• Mortgage note stating the buyer’s promise to repay the loan.
• Mortgage or deed of trust securing the mortgage note.
When all the above is done, you become the owner of the property. You will be allowed to take possession immediately or shortly after the closing, unless you have made an agreement with the seller to take possession either earlier or later.
Sources: Bankrate.com; Wisepiggy.com; Nolo.com; Nationstitle.com
Photo credit: Freepik.com