Closing day: What to expect when you close on a house
Closing on your home is an exciting day. It’s also a day you should prepare for to make sure everything goes smoothly.
Closing, also known as settlement, is the final step in the home buying process. When you walk out of closing, you officially own your home and you’ll walk away with the keys in hand.
To prepare for closing, it’s important to know what documents you’ll be receiving, reviewing, and signing on the day of your closing:
• HUD-1 final settlement statement – Itemizes all funds and costs paid by both the buyer and seller.
• Truth-in-lending disclosure – Provides information about your loan such as annual percentage rate, amount financed, finance charge, payment total and payment schedule.
• Deed of trust – States that your lender receives a lien on your property as security for your loan.
• The note – Binding legal agreement to make payments to your lender according to your mortgage terms.
• And more – Ask your mortgage banker for a full list.
A few steps to prepare for closing:
• Schedule a final walk-through of your home — Make sure the home is in the condition you agreed to buy, that agreed upon repairs are completed, and that nothing has changed since you last looked at it. This is your last chance to raise a dispute if something that was agreed to in the offer has changed.
• Ask any last minute questions you may have, such as specifications about your mortgage.
• Obtain homeowners insurance, which is required by most lenders at closing.
• Obtain title insurance — This guarantees that you are covered in case someone else comes forward as the rightful owner of your property.
• Setup utilities — Call new service providers to setup a new account or transfer an existing one, and remember to change your mailing address.
• Finalize loan — Make sure all the paperwork is in order.
• Make sure you have closing costs in order — Find out exactly how much closing costs will be. Closing costs will generally be paid with a cashier’s check.
EGEN: You want to make sure that when you actually come to the closing table, you have everything set because then it will cost the buyer more money to reschedule and reset a closing and depending on how many people are involved in that closing, that could be the next day, or a week and a half later. So you want to make sure that you’re covering yourself.
JEIMY: Take a few days before the closing day – you know your day is a certain date. The week before, sit down with your husband, your partner, whoever you’re buying the home with and take your time to read everything and have a checklist. Have a checklist and say, “Okay, I’m missing this. Yes, no.” And just go through every single paperwork, call your agent, call your mortgage person, call your bank. Do I have this? Do I need this? And you have your checklist and then you’re gonna be okay.
EGEN: you always want to make sure you know your numbers up front. That’s important. If there’s an attorney involved in the transaction, the attorney will provide that for you. If there’s no direct attorney that you’ve hired in the transaction, you will get your numbers from your bank or your lending institution will sometimes provide you those numbers. You want to make sure that you know your numbers and you’re fully prepared for your numbers.
MARIO: I didn’t realize that you could actually get a lot of the paperwork beforehand and look it over. Because when you’re at a closing everything is so streamlined and you feel a lot of pressure. You feel like you have to do this on a time schedule; that you don’t really get to sit and read line by line what you’re signing away.
STEVE: If you’re not comfortable, you should probably hire an attorney to sit there with you. It’s several hundred dollars but when you’re making a several hundred thousand dollar investment that’s really not much money at all.