Closing on Your Home
Closing is a highly anticipated day for most homebuyers – this is the day when you will receive the keys to your new home! Once the Underwriter approves your loan, the closing date will be scheduled. At the closing, you will be expected to pay the closing costs and will have to sign many documents in regards to the purchase of your home. Below are a few things to anticipate.
Paying the Closing Costs
Prior to the closing day, your title company, escrow company or attorney will review with you a copy of the Closing Disclosure, a document that provides the final total for your closing costs. You will need to get a certified check in the amount of the closing costs, as well as the down payment. Many sellers do not accept personal checks, so a certified check is recommended.
Prior to the closing day, you should have applied and received homeowner’s insurance and title insurance, as well as flood insurance if applicable. Most lenders require a Lender’s Title Insurance policy, which protects the amount they lend. A Owner’s Title Insurance policy is optional, if your lender does not require the policy as a condition of the loan. If you choose to purchase Owner’s Title Insurance, you will also need to apply and receive prior to closing. In addition, if you are planning on paying less than 20% down on the home, you will also be required to have private mortgage insurance. You need to bring proof of insurance with you on the closing day.
Signing the Documents
At closing, anticipate having to sign several documents in regards to the purchase of the home – some are required by the lender and others by the Federal and State law. Of all the documents signed, two are of main importance:
The Promissory Note. This is a document that the buyer must sign as a written promise to repay the loan under the agreed upon terms.
The Mortgage or Deed of Trust. This is a security instrument that you must sign that gives the lending institution a claim against your home in the case you stop paying the monthly payments, also known as defaulting on your home.
Taking the Keys
Once all the documents have been signed and the moneys have been exchanged, you will then receive the keys to your new home!