What Happens in the Days Before Closing
You found the house that you love, your offer was accepted, and you got approved for the loan. You are now ready to sign on the dotted line and get your keys. Closing is where you will sign the paperwork associated with your mortgage loan, and in most cases, take possession of the property. A few things to know about your closing.
Acknowledge Your Closing Disclosure
Once the loan and final figures are approved, you will get a document called a Closing Disclosure, which will include a summary of the final costs of the loan. It is important to acknowledge that you have received the Closing Disclosure as soon as possible. The lender is legally required to deliver the Closing Disclosure to you at least three days before closing, so if you don’t acknowledge receipt of you Closing Disclosure quickly enough, your closing could be delayed while that timer runs out.
How much can costs change between the Loan Estimate and the Closing Disclosure?
The costs outlined in the Closing Disclosure should be within 10% of the estimates that provided to you in the Loan Estimate.
Attend a Final Walk-Through
In most cases, you will have the opportunity to perform a walk-through inspection of the property one day before closing to make sure everything is in order. This is to make sure that the house is in the condition that was agreed upon, that any appliance or other property that was included in the contract, or to verify repairs have been completed. Here are some questions to ask as you walk through the house and property:
- Were all the agreed upon repairs completed?
- Did the sellers leave behind all of the appliance, window treatments, or other items that were specified in the purchase agreement? Are these items in the condition that you expected them to be in?
- Was there damage to the house in the process of the sellers vacating the home?
- Do the lights and faucets work?
- Does the garage door open?
- Were there any hazardous materials, such as paint or solvents, left at the house?
If there are any major issues, you can ask to delay closing or contact the listing agent to negotiate a fair solution.
What and Who to Bring to Closing
What You Should Bring
Here are some items that you will need to bring with you to closing:
- Drivers License or other valid government-issued identification
- Cashiers check or proof of wire transfer to pay your down payment and closing costs
- Closing Disclosure so that you can compare it against the final paperwork
- A list of contacts for your home purchase, such as your agent or loan officer, in case any questions come up during closing
Who Should Attend
In general anyone that was on the deed of the house prior to sale, and anyone that will be on the new deed, need to be present at closing. If any of these individuals cannot be present at closing, a power of attorney will be needed.
In some states, the buyer and seller will both be at closing, whereas in other states each party attends a separate closing. So you may or may not see the seller at closing.
You can expect a closing agent, who remains a neutral third-party, to facilitate the closing. Your real estate agent may attend the closing also, however they are not required to attend.
What You Can Expect to Pay at Closing
The closing table is where your mortgage loan and home purchase are wrapped up. There you will sign all required documents and receive the keys to your new house. You will need to pay any closing costs associated with your mortgage loan and home purchase, here are common costs:
- Down Payment: When your loan officer qualified your loan, there was a minimum contribution (down payment) required based on your loan program. This becomes the equity that you have in your house and reduces the Loan to Value to acceptable level for your lender and the loan program that you are using.
- Escrow Funds: Escrow funds are collected from your lender to make sure that there is sufficient money to pay the property tax and home owners insurance when they become due. This account is your money that is simply being held so that the lender can pay these bills, on your behalf, when they become due.
- Third-Party Fees: These fees are captured on the Closing Disclosure. They cover the costs from third parties to process your loan, such as appraisal fees, credit reports, title insurance, and settlement fees.
- Per Diem Interest: Most mortgage loans become due on the first day of the month. The per diem interest fees are calculated from the day of closing, to the 1st of the following month to cover the interest that will be due during that period.
- Homeowners Association (HOA) Dues: If your new home has an HOA, you may be required to pay the first years dues at closing.
- Discount Points: A point is a fee paid to lower your interest rate. If you chose to pay points for a lower interest rate, you will have to pay them at closing.
Why Choose Homewise Financial?
- Application process is completely online.
- Loan specialists available to answer your questions and help you understand the process.
- As a mortgage broker, we have exclusive access to a vast network of lenders to offer competitive rates and diverse loan programs to suit your goals.
- Personalized experience. We will “hold your hand” through the process to ensure your comfortability with the loan program and process.