Home Buying – Step 7. The Closing

Reaching For A Home

Finally, the closing!

The closing is in essence, the final step toward taking ownership of your new home.

Be prepared to sign dozens of documents at the closing. You will need to show your ID as your signature will be notarized. And, thanks to current technology, some closings can now happen remotely using wire transfers and overnight delivery of documents.

Prior to the closing, you should receive a closing statement from either your real estate agent, attorney or escrow officer. The closing statement details your final closing costs and the money you need to bring in the form of a cashiers check (or wired in) on closing day. It’s a good idea to ask for the statement early, so there aren’t any last-minute surprises.

Mortgage Closing: What Buyers Need to Know

At the end of this last step of buying a home, you (the buyer) become the legal owner of the home. Don’t be intimidated, we are going to walk you through the details of the mortgage closing so you’ll know  what to expect.

What happens at a mortgage closing?

At the closing, all legal documents – both those related to the mortgage loan and those related to the transfer of the property from the seller to the buyer – are signed. This  may include

  • The mortgage note in which you promise to repay your lender
  • The home deed which grants you ownership of the home
  • The Real Estate Settlement Procedures Act paperwork which states that you understand the closing process and financial obligations related to your mortgage
  • The Truth in Lending Disclosure Statement which lays out the terms of the loan including the annual percentage rate and information on points
  • And the HUD-1 Form which itemizes all the costs related to the sale of the home

Other possible things going on during the closing:

  • The buyer and sometimes the seller may pay costs related to escrow or closing to the lender, and the lender gives the closing agent money to cover the mortgage amount.
  • The buyer shows proof of homeowners insurance so that the lender will fund the mortgage loan, and the closing agent sets up an escrow account for the buyer, which will help the buyer pay taxes and insurance on the property.
  • The buyer will receive the title to the property; the seller or a representative of the seller will give the buyer the keys to the new place; and the closing company, attorney or title company officially records certain documents such as the warranty deed.

When will my mortgage close?

The closing happens when all of the final documents are available, and signed by all parties, and the required monies have changed hands

How does a mortgage closing differ for a purchase loan vs. a refinance loan?

  1. At the closing of a refinance, there is no seller or real estate agent. Usually just the homeowner and lender are at this type of closing.
  2. At the closing of a refinance, the homeowner has rescission period option, which is in effect a 3-day window during which the homeowner can walk away from the refinance loan without penalty.

As you can see, the Closing is the last step in the home buying process where the new owner signs all of the final documents and takes possession of the home. It can be scary, but also a very exciting time for the new homeowner.

If you are in the market to buy (or sell) a vacation home in  Northern California, Realtors associated with Century 21 M&M look forward to walking you through the process. Rest assured that Century 21 M&M Realtors will do their best to make sure that both Buyers and Sellers are protected during the transaction.

 

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