How Do I Prepare For House Closing

HOW DO I PREPARE FOR CLOSING?

Within 24 hours of the closing you should walk through the home to make sure it looks as you expected and is in move-in condition. This final inspection gives you the opportunity to see that the seller has moved out and completed all repairs agreed to in the sales contract. Make sure all appliances and systems are working and that any items the seller agreed to leave behind are in the house. If you discover something after the closing, you have no way out, so be sure to walk slowly and look carefully. 

WHAT DO I BRING TO THE CLOSING?

The lender or designee, closing or escrow agent will collect all the necessary paperwork from you, the seller and the lender, will be ordering all the documents for your closing and send you a Closing Disclosure (CD) form. The CD should be issued to you three business days before consummation of the loan defined as the time a consumer becomes contractually obligated to a credit transaction.

You are responsible to bring the following to your closing:

• Your homeowner’s insurance policy along with proof of payment.
• A certified check or electronic transfer for all closing costs and the remaining portion of your down payment.

WHAT HAPPENS DURING CLOSING?

The closing is usually held at the attorney or mortgage lender’s office. A closing agent, escrow agent and sometimes an attorney will be present. Your real estate agent may or may not attend.

Be aware there will be many documents to review and sign. Make sure you understand what each one outlines before signing. The lender or designee who sent you the documents will oversee all signings and recording of documents, collect all funds for various fees and ensure that expenses are properly disbursed.

At closing you should expect to receive one or both of the following:

• Mortgage Note: the mortgage note is legal evidence of your mortgage and includes your formal promise to repay the debt. It also spells out the terms of the loan, along with penalties the lender can impose if you do not make your payments on time.
• Deed of Trust: this document gives your lender a claim against the house if you do not comply with the terms of the mortgage. It lists the legal rights and obligations of you and the lender, including the lender’s right to foreclose on the home if you default on the loan.

Just before you receive the keys to your new home:

• The terms of the agreement between you and your mortgage lender will be confirmed.
• The terms you and the seller agreed to in the sales contract will be confirmed.
• Your loan will go into effect and you will receive your mortgage.
• Ownership of the home will be transferred.

Be very clear about when your first mortgage payment is due and where you should send it.

AFTER THE CLOSING

A few weeks after closing you’ll receive a coupon book or statement in the mail clearly listing due dates and the correct mailing address for sending your payments. Don’t be surprised when sometime after the closing you are notified that your loan is being transferred to another lender or investor for “servicing,” which means this entity will now be the collector of the loan payments. You should know, though, when you apply for the loan if the lender intends to service your loan or transfer the servicing.