Mortgage Closing Process

Posted On December 19, 2014

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The big day is almost here, when you close on your new home. Congratulations! Before you sit down at the closing table, here are a few things you should do first to make sure the process goes as smoothly as possible. In fact, the best time to start is well before your closing day:
Do a pre-closing checklist
This important step will help ensure you won’t have any surprises when it’s time to start signing your loan documents. Your checklist should include the following:
·   Make sure you have ample homeowner’s insurance that will go into effect the day you move in to your new home.
·   Get a cashier’s check for the amount required to cover your down payment and closing costs, if applicable. Make sure you take your earnest money deposit into account when you determine the additional amount you’ll need to bring to loan closing.
·   Before the day of your loan closing, do a final walk-through of your new home to make sure there aren’t any unresolved issues.
Review your loan documents before you close.
The sheer volume of paperwork that you’ll be required to sign at loan closing can seem a little overwhelming. And it’s in your best interest to read and understand it all. So it’s a good idea to ask your mortgage lender for a copy of all the documents in advance, so you have time to review them. Then, if you have any questions or issues, you can work to resolve them before your closing date.
These closing documents include:
·   Mortgage Note (or Deed of Trust), which details the debt, your pledge to pay it back, and what the lender’s rights are if you don’t.
·   Final Truth-in-Lending Disclosure, which covers any changes to your loan that may have taken place since the application process began.
·   HUD-1 Settlement Statement, which compares your actual costs to those in the Good Faith Estimate that you should have received early in the mortgage origination process.
·   There may also be several other documents to review, based on your loan and your state.
Your closing date.
This is the final day of the mortgage process. Known as the closing or “settlement” date, this is a one-time meeting when all parties get together to review every document (other than yourself, this may include your real estate agent, the previous property owner and his/her agent and an escrow agent).
Once all documents are signed, approved and funds have been disbursed to the seller, the property’s ownership will be transferred to you. This process can vary by state, so ask your lender or real estate agent how it will work for you.