1 month out: Avoid any major life or financial changes
This includes changing your job, opening new lines of credit, or making any large cash deposits or withdrawals. 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.
1 week out: Gather and prepare all the documentation, paperwork, and funds you’ll need for your loan closing
You’ll need to bring the funds to cover your down payment, closing costs and escrow items, typically in the form of a certified/cashier’s check or a wire transfer. You’ll also need to present government-issued identification, such as a driver’s license or a passport, and proof you’ve purchased a homeowners insurance policy. Your loan officer or lender will be able tell you everything you should bring to your loan closing appointment, including the exact amount of the funds you owe.
3 days out: Review the closing disclosure document
The closing disclosure shows your loan terms, final closing costs and any outstanding fees you owe. You’ll receive this document at least 3 days before closing, so you have time to thoroughly review your loan information before your closing – once you sign it, there’s an official 3-day waiting period before you can sign the rest of your loan documents. If you have questions about any of your mortgage loan information on the closing disclosure, this is the time to ask your loan officer or lender.
The closing disclosure shows the actual cost breakdown of your mortgage loan, including:
- Closing costs
- Estimated taxes, insurance, and other fees
- Interest rate
- Loan amount
- Monthly payment amount
Closing day: Review final paperwork, sign, repeat
Pro tip: Make sure you set several hours or even half a day aside for your appointment on the day of closing. There will be lots of paperwork to review and sign, and you’ll want to make sure you can take your time. A combination of the following people may also be present at your loan closing:
- Attorneys (yours or the lender’s)
- Seller’s real estate agent
- The loan closing agent
- Title company representative
- Your loan officer
- Your mortgage lender
- Your real estate or buyer’s agent
Once everyone gets settled in, the real work begins: You’ll need to review each of the following documents carefully, then sign
- Closing disclosure: An itemized list of the terms and costs of your mortgage
- Escrow statement: At closing, many buyers provide funds for future taxes and insurance. Those funds sit in a third-party escrow account until the lender or loan servicer taps into them to pay the fees on the borrower’s behalf
- Mortgage note: A legal agreement to pay the lender
- Mortgage or deed of trust: A document that puts a lien on your property as collateral for your loan so the lender can make claims against the home if you don’t follow through with the agreed-upon mortgage terms
Once you’ve signed all the paperwork, boom – you’re done! Congrats on officially becoming a homeowner. And don’t forget: Garbage day is every Thursday.
Sources: consumerfinance.gov, trulia.com
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FAQs
The week of closing You can expect the title company to provide you with a closing disclosure including the final details of your sale. This disclosure will include all of your information such as loan terms, monthly mortgage payments, and any additional fees.
What happens 7 days before closing? ›
Home sellers: What happens the week before closing
Complete negotiated repairs: Ensure all agreed-upon repairs are completed to avoid any delays. Move out of the house: Plan your move such that the house is vacated on or before the closing day.
What to do 10 days before closing? ›
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. Get a change of address package from the U.S. Postal Service and begin the change of address notification process.
What shouldn't you do before closing? ›
12 Activities to Avoid Before Closing on Your Mortgage Loan
- Avoid Applying for Other Loans. ...
- Avoid Late Payments. ...
- Avoid Purchasing Big-Ticket Items. ...
- Avoiding Closing Lines of Credit and Making Large Cash Deposits. ...
- Avoid Changing Your Job. ...
- Avoid Other Big Financial Changes. ...
- Keep Your Lender Informed of Inevitable Life Changes.
First, your lender will want to see verification of your income and Then you'll need to present your current debt and monthly expenses. Finally, you might need to provide your lender with written permission to access your credit score.
What happens 24 hours before closing? ›
You should request to do a formal walk-through of the home 24 hours before closing. During the walk-through, be sure to check that all required repairs have been made, the home is in the agreed upon condition, and that the seller has completely vacated the property. Read closing documents.
What to expect 3 days before closing? ›
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.
Do lenders check your credit the day of closing? ›
Lenders pull credit just prior to closing to verify you haven't acquired any new credit card debts, car loans, etc. Also, if there are any new credit inquiries, we'll need verify what new debt, if any, resulted from the inquiry. This can affect your debt-to-income ratio, which can also affect your loan eligibility.
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.
What is the 7 day rule for closing disclosure? ›
The TRID rule provides that the borrower can waive the seven-business-day waiting period after receiving the LE and the three-day waiting period after receiving the CD if the borrower has a “bona fide personal financial emergency,” which requires closing the transaction before the end of these waiting periods.
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 is the average timeline for closing on a house? ›
How Long Does Closing On A House Take? Closing on a house can typically take 30 – 45 days. According to an Origination Insight Report by ICE Mortgage Technology, as of September 2021, the average time to close on a home purchase was 50 days.
What is the last step before closing on a house? ›
Time to close!
This is the final step in the California escrow process, and the most important. At this stage, the homebuyer will provide a check for the closing costs that are due. The homebuyer and seller will sign a variety of documents relating to the sale.
