The home buying process can be a whirlwind that doesn’t stop until your keys are in hand. There are a lot of papers to sign and everything seems to move too quickly to keep track, so knowing what to expect when closing on a new home can give you great relief and joy and be a pleasant end to your home buying process.
The closing is an event where both the buyer and seller sign the legal documents that transfer the ownership of the property. This is typically done at a title company but can also be done at an attorney’s office as well. At a typical closing, you will review and sign all of your loan documents, provide evidence of required homeowner’s insurance, and provide your down payment funds (if applicable).
You are essentially signing two sets of documents:
- The agreement between you and the mortgage company lending the money
- The agreement between you and the seller transferring ownership of the property
At closing, you also will be paying closing costs as well as some escrow items. A good lender and real estate agent will have already prepared you regarding these fees well before the closing so that you will be prepared with what you will pay at closing.
Before You Close
Your real estate agent will make arrangements between you and the title company for a specific time to close. You should also receive instructions on what you should bring to closing as well. This includes photo identification, funds, proof of insurance and other miscellaneous items.
Regardless if you’ve prepared extensively for your closing or are reading this the night before, be sure to ask questions. Make sure everyone has everything they need. Knowing what to expect is only half of the preparation as communication amongst all party members present at a closing is also critical to a painless closing.
The Documents You Will Sign
Following is a list of documents you can expect to sign at closing:
- HUD-1 Settlement Statement
- Final Truth-In-Lending Act Statement
- Good Faith Estimate copy
- Certificate of Occupancy
- Mortgage Note
- Lender Disclosure Form
- Mortgage or Deed of Trust
Once you and the seller have signed all of the closing documents, the lender will review and provide the closing agent the approval to fund the loan. This is when you get your keys and you have officially and successfully closed and purchased your new home!
A Few Tips to Remember
Make sure you receive a complete copy of all of the closing documents along with a copy of the appraisal and any warranties. Check and ensure you know when the first mortgage payment is due and how you are expected to make the payment. This can be easily done by reviewing the loan documents in advance so there aren’t any surprises.
A smooth closing can be done in as little as 30 minutes, but your closing isn’t complete until the keys are in your hands, so if possible, take the day off. Mistakes can happen and a simple typo can hold up a smooth closing, so expect the unexpected.