Step 10: Close the Loan
The closing is the day when the seller receives the check and the buyer receives the deed to the property. Generally, this is the also the day that the buyer receives the keys to their new home.
Preparing for the Closing
- Do a final walk-through inspection one or two days before closing to make sure that the house is in about the same condition it was at the time the offer was made and that all of the appliances still work.
- At least 3 days before the closing, both you and the seller should receive a copy of the Closing Disclosure, which states the final terms of the loan. It tells the seller how much money they will pay or receive at closing and tells you how much money you need to close. Compare this with your original Loan Estimate. If something looks different from what you expected, ask why. Now is the time to resolve problems—if the explanation you get isn’t satisfactory, keep asking questions.
- Get a cashier’s check or wire instructions to fund your down payment and closing costs.
- Meet with the lender or title company to sign the mortgage papers to borrow the money. Be sure to allow enough time to read all the documents and ask as many questions as you need so that you understand the terms of the loan.
- Call the utility companies and arrange to have the utilities transferred to your name as of the closing date.
At the closing table you will be signing many binding contracts, and it’s important that you understand what you are signing. The most common documents include:
- The Closing Disclosure: discloses final terms of the loan and is completed by the escrow agent/title agent, is an itemized list of all services provided and fees charged to both you and the seller.
- The Mortgage Note: your promise to repay the lender according to the agreed terms.
- The Mortgage: document used to secure the mortgage note. Recognizes your ownership of the property but gives the lender the right to claim the property if you fail to meet the terms of the note or default.
- Affidavits: can vary and attest to certain information in writing.
- The Deed: legal document conveying title to the property from seller to buyer.
- Title Insurance: policy that protects against any title defects, such as liens or other claims against the property.
- Title Abstract: summary of the public records that relate to ownership of property.
- Survey of Property: contains boundaries of the property and all structures and important features of property.
- Escrow Analysis: provides detailed information on your escrow account.
End of Steps