All the planning, house hunting and waiting are over. The final step in the home-buying process is closing on your new place. Before you get the keys for your new home and officially call it your own, you have one more sprint ahead of you: paperwork. When you know what to expect, the process won’t seem so overwhelming. All parties involved want your closing to be just what you imagined: a joyous occasion with little or no hiccups.
Closing processes vary slightly depending on the type of transaction, as well as local, state and municipal laws. While the differences might be subtle, it’s always good to know what steps to take when preparing to close. The following are answers to commonly asked questions about closing:
Who will give me bottom-line figures for closing costs?
You can receive estimated figures from your mortgage professional, but you’ll need to speak with your local title company or real estate attorney for a final amount. You should receive a copy of your closing documents to review ahead of time so there are no surprises on closing day. Your title agent or attorney will calculate:
- Closing costs
- Prorated property tax
- Homeowner’s association fees (if this applies to your neighborhood)
- Homeowner’s insurance
- Closing credits
Can I use a personal check to pay for closing costs?
It depends on the amount due and your state laws. Some states will require a certified bank check or cashier's check for any amount, while others may allow personal checks for anything under $1,000. Depending on your state and type of transaction, it’s best to consult with your title agent, attorney or mortgage professional.
When preparing your funds for closing, you must only use funds from an approved account. An approved account is one which your mortgage professional and underwriter have reviewed and approved prior to issuing your clear to close. If funds for closing are drawn from a non-approved account, your closing will be delayed until the underwriter can review the most recent two months bank statements for that account, which can take up to 48 hours.
Where to go, what to bring & what to expect?
- The location will be chosen by the seller. It typically takes place at a title company or attorney’s office.
- Bring a form of photo identification.
- Bring your funds to close. Bring a check to cover your closing costs and down payment, unless you got a cashiers check or wired the money.
- Review your closing documents in advance. You should receive a copy of your closing documents to review ahead of time so there are no surprises on closing day. This is one of the biggest purchases you’ll ever make, and you should know exactly what you’re signing up for.
- Prepare to sign a lot of documents. While the process varies by state, typically a professional (attorney or closing agent) will explain every document and let you know where to sign. You may need to wait for the lender’s wire to clear—this is your actual loan—then you’ll be handed the keys, congratulated and sent on your way with copies of all the documents.
- Be prepared. Knowing what to expect can help ease some of the stress homeowners experience during the mortgage process. If there are any confusing terms or conditions as you work through the paperwork, don’t be shy about asking questions!
Once you sign all the paperwork, it’s time to breathe a sigh of relief. You may need to wait for the lender’s wire to clear—this is your actual loan—then you’ll be handed the keys, congratulated and sent on your way with copies of all the documents. You’re officially a homeowner. Congratulations! The home-buying process may not be easy, but having a beautiful new home to call your own is worth it in the end.