Congratulations! You’ve made it to the finish line of the home-buying process! It’s now time to finalize all the details of the transaction. It’s a good idea to prepare yourself for what happens at the closing table ahead of time so you know what to expect.

What You’ll Do At Closing

The application process is finished, and you have a closing date on the calendar. Once that date arrives, you’ll meet with several representatives to legally sign your mortgage and other documents, pay any required payments, and receive the keys to your new property.

More than likely, closing will be held at your title company’s office. Occasionally, it might take place at the office of an attorney or the lender. Make sure to bring copies of any paperwork received or signed during the homebuying process, as well as two forms of ID, and any funds required to complete the transaction. Here’s what will take place the day of closing:

• You’ll review and sign all of your loan documents. Be sure that you understand the terms of each document. If something is different from what you expected or agreed to, don’t sign until the issue is resolved.

• You’ll provide proof and documentation of your homeowners insurance and inspections (if applicable).

• You’ll provide a money wire, or a certified or cashier’s check to cover the down payment (if you have one,) closing costs, prepaid interest, taxes, and insurance. 

• Your lender will distribute the funds covering your home loan amount on your behalf to the closing agent.

• You may also be required to set up an escrow account that will cover property taxes and homeowners insurance, in addition to your monthly mortgage payment.

What You’ll Sign At Closing:

Here are the three main items you’ll review and sign at the closing table:

A deed of trust or mortgage -This document puts a lien on your property as collateral for your loan.

The promissory note- This is a legal agreement stating that you’ll pay the lender, including when your payments will be made and where you’ll be sending them.

Closing disclosure- Your closing disclosure (or CD, as it’s often referred to,) is an itemized list of your final credits and charges, based on the terms of your contract.

Homeowner tip: Don’t sign your Closing Disclosure if it’s significantly higher than your Loan Estimate, or if a different rate is presented on your loan than you agreed to. In many cases, such discrepancies are easily resolved. But it’s better to be sure you’re satisfied and understand your loan terms before signing anything.

What You’ll Pay At Closing

Alongside your down payment, or other prepayments related to your home purchase, you’ll likely be paying closing costs. These will usually be between 3-5% percent of the total loan amount. 

Get a sense of how much your closing costs will be from the Loan Estimate your lender will provide you. This happens within three days of submitting your mortgage application. When your loan is approved, and at least three days before closing, you will receive a Closing Disclosure. This document lists your finalized closing costs.

It is possible for you to prepay some of the fees noted in your Loan Estimate and Closing Disclosure before closing, like the ones associated with credit reports. For the rest, check with your closing agent regarding which payment methods are acceptable.

Who Comes to the Closing Table?

The number of people at your closing will depend on several factors, including your property’s location, the type of property, and the nature of the sale. For example, is it an all-cash purchase, or a traditional mortgage? Here’s who might have a seat at your closing table:

Buyers

• Your attorney (if you have one)

• A representative of your lender

• Your real estate agent

• The closing agent (usually a representative of the title company)

Sellers

• Their attorney (if they have one)

• Their representative (usually the seller themselves)

• Their real estate professional

• A notary public

How Long Does Closing Take?

Closing day typically takes place four to six weeks after you go under contract on your home, though it does occasionally take longer. The closing process itself may take several hours.

Once all the paperwork is signed, you’ve secured your mortgage, and the closing is officially complete, you’ll get the keys to the property. Be sure to keep all of your closing documents in a safe place. Congratulations! Now comes the fun part: You can officially change your address, meet your new neighbors, and move into your new home!

Pro-tips: How to Avoid Closing Glitches

• Review documents for errors.

• Allow enough time for any money transfers to clear, and for the loan to close.

• Handle home repairs in advance.

• Make sure the title is clear.

• Don’t make major changes to your finances or spending habits, such as buying a car or opening a new line of credit, prior to closing.

Knowing what’s expected of you on closing day and understanding key home buying terms can make your purchase process smoother. We hope you found this information helpful, but if you’re still unsure, feel free to reach out to us here at Team Lassen! We’re always happy to answer any home buying questions you may have!