Step 10: Close the Loan

• About the Closing

  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
  • 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. Now is the time to resolve problems—if the Closing Disclosure doesn’t match your original Loan Estimate, ask why.
     
  • Do a final walk-through inspection one or two days before closing to make sure that the house is in the same condition it was at the time the offer was made or any repairs required before closing were made.
     
  • 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.
• Closing Documents

  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.
     
  • 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. An escrow account is an account set up by your lender to pay certain property-related expenses, such as property taxes and insurance premiums, on your behalf.

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