This is the day you have been waiting for! Your boxes are packed and you are about to get the keys. Once you have found your dream home, made an offer and had it accepted, you are now ready to enter the final stage toward home ownership…closing. Closing is when all parties involved sign the required papers and the ownership of the property is transferred from the seller to the buyer. Generally, within 24 hours prior to closing you will be able to take a walk-through of the home you are buying. This allows you to take a final look at the house and ensure that all your conditions have been met.
The closing can only occur after the lender has processed the loan and is ready to close. Depending on where you are purchasing a home any number of individuals can handle the closing process. The closing agent could be an escrow officer, a closer, the title company or the Realtor®.
Closing times can vary greatly. There is an abundance of paperwork associated with closing, therefore it is vital to keep your records organized and clarify with your agent as to what paperwork you need to provide. The paperwork may consist of: verification of employment, bank account and credit checks, W2s, appraisal paperwork, preliminary title report, title insurance, homeowners insurance and condition of sale. This is also the day you sign all the papers, including a Deed of Trust which is the document that promises you will pay back the bank that lent you the money to purchase the property. It is a lengthy legal document that can’t be changed or your loan won’t be funded. It states such things as the amount borrowed, the interest rate, your promise to keep the property insured, maintained and free of hazardous chemicals in large quantities. In our market it is typical that you sign all the loan papers and the real estate papers and you are given the key at closing. In some instances the seller may have negotiated a few extra days in the property. While most lenders do not require a full home inspection it is to your benefit to make sure that the home is fully inspected.
To close more quickly it helps to have received loan pre-approval rather than loan pre-qualification, this is because loan pre-approval requires verification of certain items upfront, before signing the purchase contract. Also, make sure your down payment funds are liquid. If they are in a stock account (mutual fund, bonds, bank CD, etc.) there can be a lag time before they are available to you. Make sure you find out that timeline from your banker.
Once all of the paperwork is in order, be sure to confirm the date and time of closing. Then, three to four days before closing ask your loan processor or closing agent for your settlement statement. The settlement statement details all the costs involved in securing your loan and lists the final amount of money you will need to bring to the closing table. Make sure to ask your loan processor or closing agent about any costs you don’t understand or feel are mistakes. Closing payments may require a significant amount of money, thus it is imperative that you (the buyer) have your finances in order when you go into closing. Lastly, personal checks are not accepted so be prepared with a certified or cashier’s check, or wire the funds to the Title Company.
Finally, you and the seller meet at the closing table, where the seller relinquishes the deed and you make a deposit. Congratulations!!!!! You are now a homeowner and you can paint the walls any color you want and hang pictures with abandon, not fearing that the landlord will withhold your damage deposit.
~Submitted by Kreya Kadam