Once the closing officer has verified that you have your binder and paid receipt for homeowners insurance, he or she will explain and ask you to sign each closing document. Your closing officer will answer any questions you have about the documents before you sign them, so don't hesitate to ask.
Typically, the closing officer will begin by reviewing the Mortgage Note and the mortgage document and ask you to sign them, followed by the Closing Disclosure (CD). The costs being paid by the sellers and the buyers will be itemized and include:
- All the buyers' and sellers' closing costs
- A summary of both parties' transactions, showing how funds are transferred among the buyer, seller, lender and any other parties involved in the sale
- The net amount due from the buyers and the net amount that will be paid to the sellers
- Commissions to real estate agents involved in the sale
- Any lender's charges made in connection with the loan, such as points and other fees
- Items that the lender may require to be paid in advance, such as interest due from the date of the closing until the first mortgage payment
- Amounts deposited in escrow to cover insurance and property taxes.
- Title charges for the title search required by the lender and title insurance policies for the lender and the buyer
- Charges to cover recording the mortgage and deed at the county courthouse
- Tax service fee to cover the lender's cost of researching the tax rate for the property
The closing officer will then go over the summary of each party's transaction. The price of the home is listed at the top of both columns. Amounts are added or subtracted in both columns to arrive at the net amounts due from the buyer and due to the seller.
After the closing officer has covered the entire Closing Disclosure, he or she will ask for a check for the down payment and closing costs. When all of the buyer's documents have been explained and signed, the closing officer will move on to the seller's documents.
Then the closing officer will review both of the following documents, making sure that the legal descriptions on each document match exactly:
- The Deed The Deed is the legal document that transfers ownership of the property from seller to buyer. Any mistakes on the deed could affect your ownership of the property, so they must be identified and corrected before you close the purchase. After the closing, the closing officer will take care of recording the deed with the Registrar of Deeds in the county in which the property is located.
- Commitment for Title Insurance When you buy a home, in most cases you’ll be required to obtain title insurance. This protects your legal ownership of the property you buy. Prior to issuing the insurance, the title company will conduct a thorough search of public records to determine exceptions to coverage, such as any liens or restrictions that affect ownership of the property. The insurance company informs you of any outstanding liens so you can require the seller to satisfy them before you close.
Prior to closing, the title company will issue a commitment for title insurance. This is not the actual policy, but it guarantees the policy will be issued if conditions specified in the commitment are met. In almost all real estate transactions, separate title policies will be purchased for the lender and buyer. As the buyer, you would typically purchase the lender's policy, which covers only the amount of the loan. The buyer's policy – which insures you, the buyer – is for the full sales price and is often paid by the seller.
Finally, the closing agent will distribute the money generated by the sale. He or she will present checks to:
- The sellers
- The sellers' lender, if there is an existing mortgage on the property
- The real estate agents involved in the sale
- Any others who may be indicated on the Closing Disclosure
FAQs
Your lender is required by law to give you the standardized Closing Disclosure at least 3 business days before closing. This is what is known as the Closing Disclosure 3-day rule. This requirement is thanks to the TILA-RESPA Integrated Disclosures guidelines, which went into effect on October 3, 2015.
Can you be denied after closing? ›
If your financial situation changes suddenly, for example, a significant loss of income or a large amount of new debt, then your loan could be denied. Issues related to the condition of the property can lead to a loan denial after closing.
Do lenders check your credit the day of closing? ›
Do Lenders Check Your Credit Again Before Closing? Yes, lenders typically run your credit a second time before closing, so it's wise to exercise caution with your credit during escrow. One of your chief goals during escrow should be to ensure nothing changes in your credit that could derail your closing.
What should my closing statement be? ›
The closing statement should also detail the purchase price of the home, deposits paid by the buyer, and seller credits. Prorated amounts. If a buyer or seller is paying prorated amounts toward property taxes or homeowners association (HOA) fees, then these also would be included on the closing statement.
What happens 7 days before closing? ›
Lenders typically do last-minute checks of their borrowers' financial information in the week before the loan closing date, including pulling a credit report and reverifying employment. You don't want to encounter any hiccups before you get that set of shiny new keys.
What not to do after closing? ›
5 Things to Not Do After Closing Day
- Don't Ditch Your Documents. Closing day will leave you with a pile of paperwork that may be tempting to pack away. ...
- Don't Rush Renovations or Big Purchases. ...
- Don't Fall for Scams. ...
- Don't Be in a Hurry to Refinance. ...
- Don't Ignore Maintenance.
You have signed all the papers necessary and have reached an agreement. Your lender is bound by law to stick to your contract. After closing, your lender cannot go back on the arrangement they have made with you. Your loan can be denied anytime from the point of application to the point of closing.
How long does final underwriting take? ›
Underwriting—the process by which mortgage lenders verify your assets, check your credit scores, and review your tax returns before they can approve a home loan—can take as little as two to three days. Typically, though, it takes over a week for a loan officer or lender to complete the process.
What happens 2 weeks before closing? ›
Two Weeks Before Closing:
Contact your insurance company to purchase a homeowner's insurance policy for your new home. Your lender will need an insurance binder from your insurance company 10 days before closing. Check in with your lender to determine if they need any additional information from you.
Do they check your bank account before closing? ›
Lenders review bank statements before closing to assess your financial responsibility and ability to repay the mortgage. Bank statements play a crucial role, revealing your financial habits, income, and spending, impacting mortgage approval.
Ultimately, you must pay for every day that you own your property and will not pay for the days that you no longer own it. If you overpay, you'll get money back. If you don't make that last mortgage payment, you should be okay – as long as everything goes as planned.
What can you not say in a closing argument? ›
Arguments cannot be irrelevant, confusing, or prejudicial.
For example, name-calling is generally forbidden. And asking the jury to "send a message" to other criminals by finding the defendant guilty may be improper since the focus is only whether the particular defendant on trial committed a crime.
What makes a strong closing statement? ›
Include a call to action.
Once you identify what you want people to do as a result of your speech, conclude with a clear call to action that specifically tells the audience how they can get involved. Make sure it's a reasonable request as opposed to something too unrealistic.
Which document is the most important at closing? ›
The most important originals are the purchase agreement, deed, and deed of trust or mortgage. In the event originals are destroyed, you might be able to get certified copies of these documents from the lender or closing company, but you don't want to rely on others' recordkeeping systems unless you have to.
How do you count the 3 days from the closing disclosure? ›
The three-day rule requires the counting of “business days,” which are “all calendar days except Sundays and the legal public holidays specified in 5 U.S.C.
What to expect 3 days before closing? ›
Giving you three business days to review your Closing Disclosure before you sign on the dotted line is designed to protect you from surprises at the closing table. It also gives you time to consult with your lawyer or housing counselor and ask all the questions you might have about the terms of your mortgage.
Can I waive the 3 day waiting period closing disclosure? ›
Modification or waiver.
A consumer may modify or waive the right to the three-day waiting period only after receiving the disclosures required by § 1026.32 and only if the circ*mstances meet the criteria for establishing a bona fide personal financial emergency under § 1026.23(e).
What is the longest you can wait to close a house? ›
It is important to note that while average closing times might be 47 days for a purchase and 35 days for a refinance, most loans will actually take between 30 days and 75 days to close.
