It’s the final step in your home purchase or sale, the closing. In the most simple terms, a mortgage closing transfers ownership of the home from the seller to the buyer. After the buyer and seller leave the table, the deal is done. The buyer has the keys to their new house and the seller/ mortgage company has the money.
If you’ve never closed on a home before or haven’t done it in a while, it can seem daunting. But if you are prepared, it will be much easier. Here are a few things to do and what to expect from the closing:
What to do before the closing?
- Read everything. If you don’t understand any of the documents or the process, ask your lawyer. If you’ve read everything prior to the closing then all you will have to do is affirm that you understand. This will make the closing process much faster.
- BUYERS: Complete your final walk through. Not completing the final walk through can and will delay a closing.
- BUYERS: Keep credit even. Don’t open any new credit cards, run up large balances on current credit cards or purchase furniture on credit. If you do, this could be a red flag to the lender and could delay or cancel your closing.
- Confirm the location of the closing. Your Realtor will provide you with the location. Some lenders have it at their offices, others have it at a title company or real estate attorney’s offices.
What should you bring?
- A copy of all of your paperwork
- Your valid, government issued photo ID
- BUYERS: Bring a certified cashier’s check (or wire) for the closing costs made out to the title company/closing company. It’s also a good idea to bring your checkbook in case the estimate is off.
- SELLERS: Bring all the keys to the house. This includes key-less entry codes, alarm codes, and garage door openers.
What actually happens on closing day?
- The buyer or the buyer’s lender will transfer money to the bank/owner via check/wire transfer
- Seller signs the deed over to the buyer
- Title company registers the deed with the appropriate offices
- The seller receives proceeds from the sale after all balances and closing costs have been paid
- The buyer receives the keys, access codes and garage door openers to the property
Who will be there?
This varies from location to location, but generally the cast of characters includes:
- Mortgagee (you and every person named on the mortgage)
- Home seller and seller’s real estate agent
- A title company representative/attorney/lender representative – there to ensure everything is properly signed and filed
- Buyer/Seller attorneys
How long will the closing take?
A closing can take anywhere from an hour to several hours, so plan accordingly. If you review all the documents prior to the closing, it will expedite the process. But that doesn’t mean you should rush the closing. Take time to ask all the questions you need to ask. These are legally binding documents, so you should be clear on what you are signing.
The good news is a great real estate agent will walk you through every step of the process to make you feel comfortable.