Mortgage Closings
AnnieMac Education Center
The final step in the process of purchasing or refinancing a home is the home closing. This is when you finalize all the details of the transaction and make sure every document is signed.
What to Expect at a Mortgage Closing?
Once you have made it through the entire mortgage application process, you will get a closing date. At a mortgage closing, you will meet with various types of legal representatives to sign your mortgage and other important documents, make all required payments, and receive the keys to your new home.
Your closing will likely be held at the office of the title company, attorney, or lender. Due to the ongoing COVID-19 pandemic, some closings have been held virtually to avoid the spread of the virus. Discuss protocols with your real estate agent to get more information.
At your loan closing, you will participate in the following:
- Review and sign all loan documents. Before you sign, make sure you understand the terms of each document and do not sign if something is different than what you agreed to.
- Provide documentation of homeowner’s insurance and inspection results.
- Provide a certified or cashier’s check to cover the down payment, closing costs, prepaid interest, taxes, and insurance.
- Your lender will distribute the funds to cover your home loan amount to your closing agent.
Closing Costs
Closing costs are the fees and expenses you need to pay before becoming the legal owner of a property. You should expect to pay 2 to 5 percent of the mortgage loan in closing costs. Closing costs include:
- Origination fee
- Underwriting fee
- Appraisal fee
- Credit report fee
- Title search fee
There are three main documents you will need to review and sign at the closing.
- A deed of trust or mortgage
- The promissory note
- A closing disclosure
Who attends the closing?
Individuals from both the buyer's side and seller’s side need to attend the closing.
The buyer's side:
- Your attorney
- A lender’s representative
- Your real estate professional
- The closing agent
The seller's side:
- Seller’s attorney
- Seller’s representative
- Seller's real estate professional
- A notary public
During the closing, you will receive a copy of a few important documents. These include:
- Loan estimate: this document contains important information regarding your loan, terms, interest rate, and closing costs.
- Closing disclosure: this document outlines the details of your mortgage.
- Initial escrow statement: this form contains any payments and charges the lender will pay from your escrow account during the first year of your mortgage.
- Mortgage note: This document states your promise to repay the mortgage. This will indicate the amount and terms of the loan, and what happens if you fail to repay the mortgage.
- Mortgage or deed of trust: this document secures the mortgage note and gives your lender a claim against the home if you fail to live up to the terms of the mortgage.
- Certificate of occupancy: you will receive this certificate if you are buying a newly constructed home.
In Conclusion
Attending your mortgage closing is an important step in the mortgage process. If you have any questions or concerns, make sure to talk to your real estate professional to get all questions answered.