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Preparing For Your Mortgage Closing Day

The big day is almost here! The day when you sign the final papers and collect the keys to your new home.

Pre-Closing Prep

Before you reach those exciting moments of moving into your new home, it’s important to prepare for closing day with a few final action steps.
 
  • Do a final walk-through of your new home. If your contract includes this provision, it gives you the opportunity to make sure any needed repairs were completed as promised. These repairs are usually based upon problems identified during the home inspection, but they may include other items.
  • Review your Closing Disclosure form. This includes your exact mortgage payment, your loan terms and other important details. The amount on this form should match the Loan Estimate document you received (usually electronically) when you applied for the mortgage. If there are any discrepancies, notify your Mortgage Loan Originator right away.

Your Seat at The Closing Table

A few more signatures and you’ll become a homeowner. Here are some key documents you’ll sign at closing.
 
  • The Promissory Note. This legal document is your agreement to repay your mortgage. It contains details such as the loan amount, interest rate, payment due dates and the loan’s term length. You and any co-borrowers should read this document carefully, and compare the details with the Closing Disclosure your lender provided three business days prior to the closing date.
  • Mortgage, Security Instrument or Deed of Trust. (This form may be called any one of the three names, depending on the laws in the state where you are buying a home.) When you sign this document – which explains the borrower’s rights and responsibilities – you are agreeing that the lender has the right to foreclose if the borrower does not repay or violates other terms of the mortgage.
  • Initial Escrow Disclosure. This document shows the breakdown of monthly payments, and reflects the charges a borrower is agreeing to pay each month for principal and interest on the loan, as well as money set aside to pay property taxes and homeowners insurance. (Rules for how escrow accounts work may vary depending on the state you live in; ask questions at loan closing if you are unsure about your state’s rules.)
  • Deed. This document transfers ownership of the property from the previous owner to the home buyer. It contains the names of the old owners and new owners, and includes a description of the property. The previous owner signs this document. You, as the new owner, should carefully read this document and ask any questions.

As mentioned above, real estate transactions are subject to state and local laws. Your loan closing experience may include more than the basic information included in this article. Any questions or concerns about your unique circumstances can be answered by the settlement agent or attorney who is conducting the loan closing. These professionals are impartial third parties who oversee the final details of a real estate transaction.

 
Congratulations on your new home!


Source materials:
  • Guide to Closing Forms. Consumer Financial Protection Bureau. Web. 30 Dec. 2015. http://www.consumerfinance.gov/owning-a-home/resources/mortgage_closing_forms.pdf
  • Your Closing Checklist. Consumer Financial Protection Bureau. Web. 30 Dec. 2015. http://www.consumerfinance.gov/owning-a-home/resources/checklist_mortgage_closing.pdf

- By Stephanie Clark , Nov 16, 2018



 
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