After months of viewings, weeks of negotiation and endless waiting, that momentous day of becoming a new homeowner has arrived – the day your dream home becomes your very own. Today’s the day you’ll leave renting behind and join that special breed known as “homeowners”. But before you can start the really hard work – deciding where the couch will go and hanging the drapes – you must first negotiate your way through closing.
The date closing takes place depends on when the seller is moving out, when you’re moving in, and when all of mortgage details are concluded. By requesting a closing date near the end of the month, you can minimize some of the interest you have to prepay on the mortgage.
Closing involves the simultaneous exchange of documents, and funds needed to complete the deal. The agreed purchase price is paid to the seller by a combination of the down payment, buyer’s own funds, and the proceeds of the buyer’s loan. The seller gives the purchaser the deed, other transfer documents, and the title to the property. But before the keys are handed over and you walk away a homeowner, there are processes that all have to happen simultaneously and will include just about everyone who has been involved since you found the property.
Not surprisingly, with so many attendees involved, timing is everything. The shortest closings take about an hour. It’s always a good idea to leave extra time for anything that comes up last-minute. If you’re going to be moving on the same day that you close, schedule the closing for early in the day.
Be sure to bring your favorite pen because you’ll have to sign a lot of papers. Buying a home is an intricate procedure and you need to sign many crucial bank documents. These can include a truth in lending statement, the note, the mortgage, the deed, tax receipts and others.
You’ll need to organize a certified check for the closing, so leave time to swing by the bank. Your real estate agent should have told you in advance how much to bring, if not you’ll have to call ahead. This check must cover closing costs, any down payment for the house and escrow costs. Without the correct amount, the closing will be slowed down.
You’ll pay for any closing costs, as well as lender fees, including an appraisal fee and credit reporting fee. Third-party fees for services not done by the lender, such as a settlement fee, title insurance, and attorney’s fees will also need to be paid.
You’re also responsible for prepaid items that must be paid to your lender in advance, including prepaid interest, hazard insurance, and the deposits for setting up a home escrow account. Have your homeowner’s insurance policy ready and remember to bring a receipt for the policy.
The process of a real estate closing seems daunting, but don’t worry, it’s just a series of steps to work through. Closing is exciting; it’s the end of the home buying process. With the right of preparation, you may even enjoy the experience.