In the home buying experience, the last step is often the closing. Part of this final stage is securing your mortgage loan. Should you fail to get your application approved, your home purchase might not be able to push through. For this reason, it is always important to review the details in preparation for the big day.
This guide will help you make sure your mortgage closing goes smoothly. To learn more about the steps to buying a home, connect with The Groesbeck Group today.
The closing: An overview
The closing occurs on a date agreed upon by you and the seller. This meeting, which can take place in the office of the lender, the escrow officer, or the title company, will finalize the transaction. At the end of it, you will walk out as the new owner of the property.
This is what usually occurs during closing:
The loan documents will be reviewed (and resolved, if needed) and signed by all relevant parties. These documents are the deed of trust or mortgage, the closing disclosure, which includes an itemized list of expenses, and the promissory note, which formalizes your agreement with your lender.
Documentation to prove certain contingencies were met will be presented, but only if applicable.
- As the buyer, you will transfer the money for the down payment and closing costs. Closing costs usually amount to 3 to 5 percent of the loan. Depending on what was discussed, you can pay through cash, a certified or cashier’s check, or send the money through wire transfer.
If you are transferring money through the wire, it is best to do this in advance, allowing the banks to process the transfer.
- The lender releases the home loan to the closing agent.
The meeting might take anywhere between an hour or more, depending on additional discussions and negotiations. To cut the time, it helps to review everything beforehand and establish clear communication with your mortgage lender and the seller’s party.
Go over the important details
Review all of your responsibilities and obligations in regards to the application. For instance, how much will your monthly payments be? When will they be due? Do they allow for a grace period if you cannot make the payment on the exact due date? If you applied for an adjustable-rate mortgage, when will your monthly payments change? Make a note of important dates. If it helps, mark these out in a calendar you frequently use.
Another important information to make clear of is if the loan you will be taking has a prepayment penalty. It is a fee you will have to pay in case you pay off your mortgage early.
Some mortgage companies and lenders require borrowers to get private mortgage insurance (PMI). Clarify if this is the case, and if so, go over the cost as well as the length of time you need to have it before you can remove it.
Will the seller shoulder some of the closing fees?
The seller can offer to pay off some of the closing costs, which include the origination, appraisal, title search, and underwriting fees. But it ultimately depends on what has been discussed. As such, it is advisable to discuss this with the seller and your mortgage consultant before the contract is signed and the closing process begins. To make things clear and official, any fees that the seller agrees to shoulder should be included in the paperwork.
Before closing day, go over these with the seller once again.
Who are the right people to bring to the closing?
Aside from you, your real estate agent, and the seller and their representative, a number of other people can be present at the closing table. These include the closing agent, the title company representative, and the lender. If you wish, you can bring an attorney to make sure all of your legal interests are covered.
The closing agent will orchestrate the settlement meeting. In addition to making sure all of the important documents have been reviewed and signed, they will also distribute the escrow payments and closing costs.
If you are purchasing the home with your spouse or a partner, their presence in the settlement meeting is more or less expected. Avoid inviting any other person with no involvement in the transaction. This could only delay or prolong the closing process.
Closing brings you one step closer to your new home
The Groesbeck Group can walk you through the home buying process so you are 100 percent ready for closing. Contact the team today at 360.941.3734 or Info(at)JeanGroesbeck(dotted)com to learn more about Anacortes homes for sale.