By: Erin Auld
While these are the words from the 1998 one hit wonder, it also applies to buying a home. A seller was once the buyer, but now someone else is. When that someone is you, you may not know what a closing is. The closing is the final step to homeownership. Closings should be celebratory and informative. Today, I’m going to sum it up so that it’s not unknown and you can go into your closing confidently! If you aren’t buying a house but instead refinancing, much of this applies to you as well.
Come to closing with two forms of identification and your hands ready to sign! You will be signing a lot of paperwork that is mandatory to buy your home. If you want to bring your own pen, make sure it is blue ink, as lenders require documents to be signed in blue so that they can tell it is not a copy. If you must bring money to closing, wire it at least the day before your closing so you can guarantee it gets to the attorney’s office in time.
At the closing, you will meet with your attorney. You should first go over your settlement statement, which lists out all figures pertaining to the transaction. Even if you have reviewed it or the Closing Disclosure several times before closing, it is vital you walk through it one last time with your attorney before signing it. This way if there is anything that needs to be adjusted, the attorney can get on it right away.
You will sign a large stack of documents called your loan package. In this package, you will see a Promissory Note (your promise to pay the loan), a Deed of Trust (the legal document that will be recorded with the county showing everyone the bank gave you a loan and they get to be paid back), the Closing Disclosure, a First Payment Letter (telling you when your payment is due and where to send it) and a whole host of other documents depending on who your lender is. These documents may include ones that: verify your identity, verify your Social Security Number, make you promise to help the lender correct typos after closing, promise you are not committing mortgage fraud, hold the lender harmless if any structural issues arise with the house after closing, allow the next lender in line to pull your tax records, and the list goes on! Don’t be fooled if you see “Payment Coupons” – it is not 50% off your first mortgage payment, though that would be nice. It’s just a paper stub you can send your mortgage payment in with through the mail.
The size of the loan package will differ from lender to lender, depending on the type of loan you have. If you are getting a VA loan, there will be more documentation to sign as there are great regulations in place to protect our Veterans in the homebuying process, as there should be!
Once you have signed everything, your attorney will make sure that no signature lines are missed. Then you should be free to leave and to wait for the “On Record!” email. Closings can take around 30 minutes to an hour, just depending on how large the loan package is and what all questions you may have. After you leave, it could take several hours to get everything squared away, as some lenders require the attorneys to send all documents back to them to review. Once the lender has given the green light and all money is in, from you and the Lender, then the property can get on record. On Record means recording the Deed, transferring the property rights, and the Deed of Trust. Once you get that “On Record!” email, you are good to go into the house as it is now yours!
Again, make the most of your closing so that you know what you are signing. If you are not sure, ask your attorney. That is one of the many reasons we are here, to help you understand what you are signing. You should never walk out shell-shocked or confused. You shouldn’t be rushed or seen as just another number. We have the great honor of helping many people into their new home every day! We take pride in making sure our closing experience is second to none. Now that you know generally what a closing looks like, you can rest easy and look forward to your Closing Day!
