Closing day: What To Expect And How To Prepare

Closing day marks a major milestone in the home buying process. It’s an exciting day when you’ll complete your purchase transaction and become a homeowner. But even for seasoned homebuyers, it can also be stressful.

Knowing what to expect and how to prepare for closing will give you peace of mind as you head into the last leg of your home buying journey. Consider these tips before sitting down at the closing table.

There will be a lot of moving parts on closing day, but essentially this appointment is when your home  purchase is finalized. There are two big steps that you should expect to accomplish: signing your closing documents and paying your closing costs and other fees.

Sign your closing documents
Get your signature hand ready because you will be signing a lot of paperwork. Not only will you sign all the legal paperwork needed to transfer ownership of the property into your (and any other buyer’s) name, but you will also need to sign the loan documentation necessary for your lender to process and fund your mortgage.

The title agent, who works for the escrow company and acts as intermediary for your closing, will lead the appointment. The seller and their realtor will also likely be present.  Your lender, as well as your realtor, should also be there on closing day to help answer questions and troubleshoot any unforeseen issues with the paperwork. Nevertheless, make sure you understand each closing document before you sign. Here are a few documents you can expect to review:

        ▪︎  Loan Estimate
        ▪︎  Closing Disclosure
        ▪︎  Escrow Statement
        ▪︎  Mortgage Note
        ▪︎  Mortgage or Deed of Trust
        ▪︎  Purchase Agreement

Pay your closing costs
Closing is also when you will pay your closing costs and fund your escrow account. There can be a lot of fees associated with real estate transactions and this is the time when everything is reconciled. Fees that you might be required to pay include attorney fees, homeowners insurance, prorated property taxes, homeowners association fees, transfer tax, and other title fees. Before the appointment, your realtor and title agent should communicate how much money you need to bring to the table.

Preparing for closing day
One of the first things you should do before closing is complete your final walk-through. Buyers are often allowed a final walk-through to make sure no material changes have occurred, and that any agreed-upon repairs have been made.

Next, make sure you have your  identification, closing funds, and proof of insurance handy. You’ll need a government-issued photo ID, such as a driver’s license, passport, or state ID card. If you’re purchasing a property with a spouse, it’s a good idea to also bring a copy of your marriage certificate.

You’ill also need the money necessary to cover your down payment and closing costs.  The title agent will likely ask for a certified or cashier’s check made out to the escrow company. In some cases, you may need to send a wire transfer prior to your appointment.

Lastly, have a copy of your new homeowners insurance policy or proof of insurance. While most insurance companies will send a copy directly to your realtor or lender, having a backup copy is always a good idea.