How to navigate the mortgage closing process


Mortgage closing, sometimes referred to as a settlement, occurs when you sign the documents to buy a home. Remember how much paper you had to sign to buy a new car? Multiply that by a factor slightly less than infinity to get an idea of ​​how much paperwork you will have to do during the mortgage closing process.

Some settlement agents have adopted paperless closures, but the industry has been slow to change. It’s more than likely that a printer will spit out a stack of hot paper on your behalf.

The 30-year-old decision

You may not intend to stay in your home for 30 years, but if you purchase a traditional mortgage, you agree to pay a debt over 30 years. Take a moment to think about the interest you will only pay for the first five years. This is when it hits you: it really is a big deal – so big that you might not want to go it alone.

The closing lawyer represents the seller or the lender, but not you. If your state does not require a buyer real estate lawyer to be present at the close, take a real estate agent or someone who knows the process with you. This is definitely a time when no question should go unanswered. Make sure you understand the details of everything you are signing.

What to expect during the mortgage closing process

From start to finish, here is a checklist for when to close. The time between signing the contract and closing the loan is typically 30 to 60 days.

  • Take the signed sales contract to your lender and start finalizing your loan. At that point, you will determine if you want to lock in your interest rate. The lender will give you a loan quote (mandated by the TRID “Know before you have to” regulations) detailing the terms and costs of your loan within three days.

  • Order a home inspection, and maybe a radon and termite inspection. Try to program them to be able to accompany you.

  • Confirm that your lender has ordered an appraisal.

  • Follow up on issues uncovered by the home inspection.

  • Track deadlines for any eventuality, which are the terms of a sale negotiated as part of the contract, such as the seller fixing the roof or the buyer arranging the financing.

  • Contact your insurance agent to establish a owners policy to come into effect on the day of closure.

  • Schedule utility transfers and complete a change of address form. See other moving details.

  • Has the closing date been set? Make sure you know where the fence will be and how to get there.

  • Read the official closing statement before the closing date to review all the terms and fees that will be due upon signing. Compare it to the loan estimate you received earlier. If there is a discrepancy, speak to your lender immediately.

  • Know how much you will have to pay closing costs – and how you will pay (cashier’s check, certified check, bank transfer, etc.).

  • Close all contingencies.

  • Confirm with the lender that the mortgage process is on track for the scheduled closing date.

  • A day or two before closing, take a tour of the house to make sure it’s in good repair. If there is a problem, your agent should contact the seller immediately to discuss possible remedies or adjustments to the close.

  • Determine if additional information or documents will be required at closing.

  • Bring photo ID and closing funds.

  • Sign a mountain of paperwork.

What’s wrong with a house warranty?

As part of the mortgage closing process, you may have the option of purchasing a residential collateral. A typical base warranty can cost around $ 500 per year, according to Realty Times. As with any other service contract offered with a large purchase, it has advantages and disadvantages:

  • Pros: You are likely to receive discounted (but probably not free) service calls as well as repair or replacement of major appliances and systems such as electrical, plumbing, air conditioning, and furnace. Having a home warranty can give you extra peace of mind, especially if you’ve bought a struggling property.

  • Cons: There is always small print. Be sure to read the exclusions and limitations. You may not be able to choose your service provider, and some services may require additional charges.

Prepare for the unexpected

Gathering around a table with piles of documents to sign can be intimidating. Take a coffee, chat for a few moments and sit down. Take the time you need to read everything carefully.

There may be last minute problems. Charges here and there may differ from the original estimate, and you deserve a full explanation of any changes. And your interest rate could change, unless you’ve paid for a rate freeze. (Do you have it in writing?) Most of the time the closing is fine, but if things get out of hand, stay calm. You can’t be forced to close the deal if you suddenly become uncomfortable with the process.

If you decide to leave, ask how much money it will cost you. It is almost certain that you will forfeit the deposit – and there can be additional damage if you default on your contract. This is not a decision to be taken lightly.

Now that you’ve had that little moment of drama, relax. Expect things to turn out well. You’re just a lot closer to getting the keys to your new home.

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