If you have come this far, this means that it is almost time for a congratulations, but not yet. Do not forget to tie up these loose ends:
Who is going to be there?
The buyer and seller sit down together at closing. Sometimes the seller and buyer will sign at different times-which is called pre-signing or the buyer and seller may sign in a different room at the same location. The closing agent is usually a title officer, an escrow company officer or an attorney. The important thing is that the closing agent is a neutral third-party who as the knowledge and training to get everything completed correctly. You and the seller agree on the closing officer as part of the original offer on the home. In addition to the closing agent, you may also have your real estate agent or an attorney present, especially if it’s your first home. In a few states, an attorney must be present at closing.
What should you bring?
You absolutely must have the following:
Photo ID: The closing agent has to verify that you are who you say you are. A driver’s license or current passport will do.
Cashier’s or certified check: This is to cover any down payment and Closing costs you owe. Do not bring personal check or cash. You’ll know exactly how much to get the check made out for because federal law requires that you be told the amount you need to bring to closing at least one day before settlement. The closing agent will tell you whether you need one check or two and to whom they should be payable. If you want to wire the funds instead of getting a certified check, make sure you do it a couple of days in advance, to protect against any glitches at the bank that could delay your closing.
Proof of insurance: The closing agent needs to see proof that you have the insurance in effect on closing day and a receipt showing you’ve paid the policy for a year. They may have already collected that but it doesn’t hurt to bring your own copy just to ensure things go smoothly.
Final purchase and sales contract: Just in case you need to double-check a detail against closing costs.
What will you be asked?
If you haven’t already established this, you’ll need to tell the closing agent how you wish to take title of the home. You will likely decide between these three common selections:
Sole owner: An unmarried person buying a house alone has the easiest task. Title is taken as a sole owner in the individual’s name.
Joint tenancy: When a married or unmarried couple buy a house together, things get more complicated. If they choose to take title with joint tenancy, each has the right of survivorship. If the spouse or partner dies, full ownership goes to the survivor. There are tax advantages for the survivor as well, regardless of marital status.
Tenants-in-common: When two or more individuals buy a home together as tenants-in-common, they are partners who may own unequal shares and who can sell their shares of ownership independently.
Decide before you attend the closing how you wish to take title to the property. If you aren’t certain, consult an accountant, real estate attorney or estate planner to learn the advantages and disadvantages of each type of ownership.
How many papers will you sign?
More than you could ever have imagined. You’ll actually have two closings, one on your loan and one on the purchase of your house. The Documents will vary based on where you live and the specifics of your home, but it could be up to 24 just for the loan and another dozen or so for the real estate transaction. Here are some documents you’ll likely encounter:
Documents related to closing your mortgage
Promissory note: Just as it sounds, when you sign this, you are promising to pay back the sum you’re borrowing. It also outlines the terms of the loan, including any prepayment penalties and interest rates. This may not be as sexy as saying “I do,” but it’s important. Check it over carefully before putting pen to paper.
Truth in lending statement: Prior to signing your mortgage contract, you will be given a federal “truth in lending” statement, also known as Regulation Z. This sheet of paper shows your interest rate, annual percentage rate, the amount being financed and the total cost of the loan over its life. You definitely should give this document a close look to make sure there are no surprises.
Mortgage or deed of trust: This is another big step. When you sign this document, you are putting your new home up as security for the debt you now owe. Technically, the lender puts a lien on the property.
Monthly payment letter: This paperwork breaks down your monthly mortgage payment showing how much goes to principal, interest, taxes, insurance and anything else you are paying as part of the payment.
Documents related to your closing
Closing disclosure: This multi-page behemoth replaces the old HUD-1 form. It itemizes the buyer’s and seller’s closing costs separately. By law, you are entitled to get this form three days before your closing meeting and should be in the same format as the Loan Estimate you got after applying for your mortgage. You should have had time to look this over before your meeting, but to err is human. Look it over carefully again. If you are closing electronically on a house in another part of the country, there is a chance you won’t see the settlement statement in advance. Review everything carefully before signing.
Warranty deed or title: This piece of paper transfers the title from the seller to the buyer. It also contains the legal description of the property.
Proration papers: These agreements explain how the buyer and seller are dividing up the property taxes, interest and perhaps homeowner association dues for the month in which the transaction is taking place. Buyer and seller might also sign an agreement stating how current utility bills are being split.
Statement of Information: This document may be called a statement of identity. The title company uses this personal information to eliminate any confusion between you and anyone with a similar name.
Declaration of Reports: An acknowledgment that the buyer has seen and signed off on all the inspection and survey reports done on the property.
Abstract of Title: The abstract lists all recorded documents affecting title to the property.
Final Walk-Through Inspection.
More of a formality than anything else, the final inspection takes place the day before, or the day of the closing. The buyer visits the property to verify that all is in working order, everything is the same as when the buyer last viewed the property, and that there are no extra items left behind.
Cancel Home Services and Utilities.
We will provide a list of useful numbers for the termination of home services and utilities after the closing occurs.
We are ready to assist you should an unforeseen glitch pop up, even at this last stage. If something at the property breaks down or the buyers’ loan does not pull through on time, there is no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manner.