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If you are like a lot of buyers, you thought this day would never come. Remember, there is a lot to get done before you close. Documents have to be filed. The property title has to be examined. Your contingencies must be met. And, most importantly, your loan must be approved. Once you get to the closing, your closing agent will ask you to sign the biggest stack of papers you've ever seen. No need to panic. This section provides a quick guide to closing that will help you every step of the way, from a few things you'll need to do to prepare for your closing, to what will happen at your closing, followed by a few more things you'll need to do after you close.
Getting Ready for the Closing
- Keep in contact with your lender to see if the lender needs any more information. If you are approved for a loan you'll either get a commitment letter or a phone call from your lender explaining the terms of the loan.
- Choose and pay for one year of homeowner's insurance. You'll need to complete this task at least a week before your closing.
- Make sure you have a closing agent (or closer) lined up to help with the closing. Your real estate agent or loan officer may suggest a closer; however, you are free to choose your own. (Some closings have both a seller's and a buyer's closing agent.)
- Request a copy of the HUD-1 Settlement Statement from your closer one business day before closing. The HUD-1 form contains a list of all of your closing costs. Compare it to the good faith estimate of closing costs your loan officer gave you when you applied for the loan.
- Contact your closing agent or real estate agent with questions or problems concerning the listed fees. Ask about any fees that don't match those listed in your good faith estimate. But understand that some minor differences will appear. That's because certain fees are based on the amount of the loan and the value of the property you end up with. They can only be nailed down when your loan is approved. These include:
- Title insurance premiums.
- Loan origination fee.
- Homeowner's insurance premiums.
- Mortgage insurance premiums.
- Property taxes.
- Mortgage registration tax.
- Inspect the property just prior to closing. Your real estate agent will arrange for your pre-closing final walk-thru to make sure your home is the same condition it was when you wrote your offer and that any required repairs have been completed.
Closing Checklist
Are you ready to close on your home? Bring your calculator to the closing and make sure there are no mathematical errors. Use this checklist to make sure you have all your “docs” in a row.
- Purchase agreement signed and accepted by seller.
- All contingencies met.
- Mortgage loan approved.
- Home appraisal completed.
- Title search done.
What Should You Bring to the Closing?
- Your homeowner's insurance binder and a receipt showing this has been paid.
- A photo ID.
- Your addresses for the last 10 years.
What Will You Sign?
- A promissory note that states you'll make monthly mortgage payments on a loan amount at a certain interest rate for a specified time period.
- The mortgage that says the bank can take the property if you do not make payments as agreed.
- And so many other papers it will make your head swim! But don't worry; the closer will explain all the forms as you go along.
What Will You Pay?
You will need a cashier's check to pay:
- The balance of your down payment. (Subtract the earnest money you paid in "good faith" when you made your offer on the home.)
- Unpaid closing costs. While you will have paid for an appraisal and credit report before closing, other fees will be due on the date you close. Refer to your HUD-1 Settlement Statement to see what you still owe.
- Escrow funds.
What Does the Seller Give You?
- A signed deed transferring ownership to you.
- Bill of sale for personal property.
- Other documents specified by your purchase agreement.
- The keys and garage door opener.
What Does the Closer Give You?
- Instructions for homesteading the property.
- The Abstract of Title, if your property is Abstract (as opposed to Torrens). It's important to store it in a safe place as you don't want the dog to eat it (such as a safety security box).
- If you purchased an Owner's Title Insurance Policy, the closer will send you this document about a month or so after the closing. Make sure to put it with your other closing documents; as you'll need it when you go to sell the property.
After the Closing
Congratulations! Now, you're a Homeowner. What else will you need to do?
- Take your deed and Social Security number to the courthouse to file for homestead tax status.
- Put the utilities in your name.
- Start packing and reserve a moving van, if required.
- Move into your new home at the time you and the seller agreed upon and wrote into the purchase agreement.
- File a change of address form with the post office so that your mail will be forwarded to your new address.
- Start a special home improvement and emergency savings account. Like it or not, like our bodies, homes are in a constant state of decline. Things will break and will need to be repaired or replaced. Get used to it! Better yet, be prepared for it!
If you'd like more information on buying a home, the Attorney General's office offers a free publication entitled The Home Buyer's Handbook. It's available for download at this website.
Additional information on Home-buying services and counseling is provided under Housing Resources.
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Mavrik Realty is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights and responsibilities as a homebuyer and homeowner.
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