Just a few steps from being a homeowner. Of course, these are very critical steps.
(Print this lesson to guide you through closing)
WHO'S WHO IN THE CLOSING PROCESS
An ESCROW OR CLOSING OFFICER oversees the process,
handling all the details and making sure everything
comes together at the appointed date and time.
The TITLE COMPANY conducts the title search to
ensure that there are no other liens or claims against
the title of your new property.
(The title company also may coordinate the closing.)
As the BUYER, you are required to attend the closing.
Your AGENT, your LAWYER and LENDER may also attend.
The SELLER either comes in person or sends a
representative - generally a lawyer.
THE KEY TO A HASSLE-FREE CLOSING
COORDINATION is the key.
A lot of things must come together seamlessly:
All pre-closing prerequisites are complete
(Listed in Lesson 7, The Offer)
All documents are ready to be signed and transferred
your financing is set
Date, time and location of the closing is firm
All necessary people will be available on that date
NOTE: Your agent or lawyer should be overseeing the
closing coordinator to spare you any last-minute surprises.
HOW DO YOU PREPARE FOR CLOSING?
Bring cashier's or certified checks to cover all fees
and costs associated with the closing,including down payment.
(Closing costs explained in Lesson 4, Financing.)
Bring i.d. such as a driver's license since some documents
you sign will be notarized.
Have proof of a paid homeowner's insurance policy.
Condo buyers need proof that the condominium association
has insurance on the property.
You need to know that the title has been cleared.
Know how you want the property title to be held.
This has tax implications.
Chances are, the closing will go smoothly. But make sure you
are ready with a Plan B in case something happens to delay
your closing date.
WHAT HAPPENS AT CLOSING?
Closing is the transfer of funds and property.
The basic process goes like this:
You (the buyer) receive check from your lender
for the loan amount.
The appropriate documents are reviewed and signed.
You endorse your loan check and present it to the seller.
You pay all the other costs due via certified check(s).
The seller presents you with the property deed and keys.
The legal documents are recorded.
During the closing, you will sign over a dozen documents.
You will NOT have time to read them thoroughly.
Ask your agent or lawyer to obtain the documents in advance
for your review.
WHAT AM I SIGNING?
Here are the main documents you will sign at closing:
Real Estate Settlement Procedures Act
Truth in Lending Disclosure says the lender
has disclosed everything to you
HUD-1 Form details all costs and credits involved
in the transaction
Loan Application verifies your loan information
Home inspection Report (reviewed previously)
Mortgage Note confirms you agree to pay the loan back
Mortgage or Deed of Trust (will be recorded)
Written estimate of Closing Costs
Escrow Analysis details your escrow account
Tax Authorization form enables your lender to
receive/pay your tax bills
IRS forms
Compliance form that says you will sign everything again
if an error is made
Sanity form confirming you are sane, of age and employed
Warranty Deed(signed, notarized)transfers title to buyer
Be sure to ask questions at closing if something isn't clear.
DON'T sign any document if it does not look right.
Congratulations! You are a homeowner!
NOW, how do you protect and enhance your investment?
We'll have some ideas and suggestions for you
in the next and final lesson, Life After Closing.
