So this is it. You’ve searched the market for your ideal home, looked at the home, made an offer that was accepted, and now it’s time to close on the home. Now what happens? When you close on the home you will have official ownership of the home transferred to you. In order for this to take place you’ll need to bring certain documentation with you to the closing.
- First, the day before you close, get together all of the documents you have accumulated throughout the home buying process. This should include the contract, good faith estimate, flood certification, proof of title search and insurance, proof of homeowners and private mortgage insurance, home appraisal and inspection reports. You may need these documents for reference when meeting for the home closing.
- In almost all home sales transactions, the contract allows for you to walk the property twenty-four hours before the final closing to be sure that the previous owners have appropriately vacated the home and have left it in the condition that it was at the time the contract was created between you and the selling party. If the home is not consistent with its status at the time of the initial contract, you can ask the closing be delayed or have the current owners put money in an escrow account to pay for any repairs that they are responsible for picking up.
- If all is well in the final walkthrough, you’re ready for closing! Present at the closing will be the closing agent, who will be in representation of your lender or the title company, an attorney representing you and your interests and likely an attorney for the seller’s interest(though having an attorney is not entirely necessary), a title company representative to provide written documentation of the ownership of the property, the home’s seller and his or her agent, you, and your lender.
- When you arrive at the closing, the first thing you will do is sign some legal documents. You’ll first sign off with your lender for the terms and conditions of your home loan and secondly will be signing documentation transferring the ownership of the home from the seller to you. The closing agent will conduct the settlement and will make sure that all appropriate documents are signed by both parties and will appropriate closing fees and escrow payments accordingly in conference of the contractual agreement.
- At the closing, you’ll receive a few important documents to take with you. One will be your HUD-1 settlement statement. This is an itemized list of all the costs associated with the sale of the home. Both parties will sign this document. As a mortgage holder, it’s important to compare the HUD-1 documented costs against your good faith estimate to be sure that your lenders estimate is in the ballpark range.
- Another important document you will obtain is your Final TILA statement. The original statement is obtained at the application of the mortgage and the final statement will have an outline of the cost of your loan and APR and takes into account any modifications made to your rate between the initial application and the closing. In addition to this you will also get the mortgage note which states your promise to repay the mortgage in the time it is allotted. It also indicates the amount and terms of the loan, and what action lender can take if you fail to make your payments.
- Finally, you will have your Mortgage(or Deed) of Trust. This is a document that secures the note on the home and gives your mortgage lender a claim against the home if you default on your mortgage payments. You may also need a Certificate of Occupancy, but only if the home is newly constructed and has never been lived in before.
Once you have signed and obtained these documents at your home closing, the seller will hand you the keys to the home and it will officially be yours!