From the buyer and the seller to the Real Estate Agent and the Loan Officer, closing on a home has different implications for different individuals. However, there are some basic facts about what’s involved during this critical final stage of the homebuying process. Let’s take a look at these facts to give you a better understanding of what to expect.
Closing on a house simply means the buyer and seller have completed the homebuying process with all the relevant documents signed and funds transferred. The buyer becomes the owner of the home and the mortgage that goes along with it.
Preparing for Closing
Once the buyer’s offer has been accepted by the seller, and the real estate purchase agreement has been signed, the actual closing date is scheduled later. A home inspection will be ordered, and the buyer and seller will work out what needs to be repaired. In addition, the mortgage lender will order an appraisal and the buyer must obtain homeowner’s insurance to provide proof of insurance for closing. (This gives the buyer and the lender protection from fires, natural disasters and other events to the property.)
Once available (usually 3 days before the scheduled closing date), the Closing Disclosure should be carefully reviewed by the buyer and compared to the Loan Estimate to make sure there are no discrepancies. If there are discrepancies, the lender should be contacted immediately.
Other moving details such as utility transfers will need to be completed and a change of address form will need to be filled out. Within a few days of closing, a thorough walk-through of the home should be conducted to make sure it’s in the agreed upon condition. If repairs are needed, the buyer’s real estate agent can contact the seller’s agent to help get the issues resolved.
Clear to Close?
Once the buyer is “clear to close,” they have met all the conditions from their mortgage lender, including a review and approval of all documentation by the underwriter. Once the loan agreement requirements have been satisfied and any issues with the home have been resolved, the closing appointment is ready to be set. The lender can then send a clear-to-close letter and the closing date can be set.
The Closing Process
Now it’s time to do the actual review and signing of documents. The buyer will receive legal documents concerning the terms and conditions of the mortgage from their lender and the transfer of property ownership from seller to buyer.
Closing documents should include the closing disclosure, initial escrow statement, promissory note and mortgage/deed of trust.
A third-party company (title, attorney or escrow) will facilitate the certified payments to all parties. Once closing funds are delivered to the closing officer, they will confirm receipt and ensure the loan gets recorded with the county. And if you’re the buyer, that means you get the keys to your home!
Other Tips for a Smooth Closing
To make the closing process faster and easier, follow up with your lender in a timely manner for any document requests or questions. Also, it’s not a good idea to change or quit your job during the closing process. Similarly, divorce, bankruptcy, and lawsuits can also have adverse implications.
At your closing appointment, make sure to bring a photo ID, along with the exact funds for closing costs and down payment in the form of a cashier’s check, certified check, wire transfer, etc. Make sure all documents have the correct spelling of your name.
Most importantly, be sure to communicate throughout the process; it keeps your loan moving forward.
A New American Funding Loan Officer is always just a phone call away with a variety of loan options. Our Loan Officers can help you with a mortgage pre-approval letter so you can know what properties you can afford and help narrow your search. Let’s get started today!