Ah, the closing date. The mark on the calendar reflecting the favorable outcome that stems from all your hard work. You’ve gathered the necessary documents and you have saved just the right amount of money. The mortgage closing is like the light at the end of the tunnel. You’ve made it.
But, you are nervous. What should you expect? What do you need to do? What if something goes wrong?
Now, let’s take a look at what to expect during the mortgage closing process so that you can get through it with ease.
What Exactly is the Closing?
When you made an offer on a property, you likely signed a sales contract that set everything else into motion. The closing is the last step in the process of buying and financing a piece of real estate. Here is where you will sign the necessary documents transferring the ownership of the property to you while also signing the loan documents for your mortgage.
If you are purchasing a property, the mortgage closing process and property closing are usually held at the same time.
Who Attends the Closing?
Those who attend your mortgage closing will vary depending on where you live, if it is an in-person signing or virtual signing, and so forth. Those you may see in attendance are:
- Your realtor or real estate agent
- The title insurance company
- An escrow company
- Your attorney if you have one
- The seller’s attorney
- Your new lender
When you attend your closing, be prepared to handle a lot of documents because the process involves a hefty stack of paperwork. Part of the reason it takes several weeks between signing the sales contract and the closing is the number of documents that need to be drawn up. Your escrow agent will review them and have them ready for you to sign.
While the documents will vary based on your location and your purchase, be prepared to sign mortgage documents, legal disclosures, tax records, and others, such as:
- The newly prepared deed to the property
- A bill of sale
- The mortgage agreement and note
- Closing disclosure forms
- A declaration of transfer tax
You will want to review these documents as you sign them to make sure the information on them is correct and that you fully understand what the document says.
The Transfer of Funds
Money often has to change hands at the closing – and this is where the closing agent (also known as the settlement or escrow agent) comes in. This person collects the funds that are due from one party and then correctly distributes them to the other party. For instance, for a mortgage, the lender will pay out the sale price of the real estate and the closing agent will pay off the seller.
Proof of Homeowner’s Insurance
Mortgage lenders require proof of homeowner’s insurance. If you have not provided this before the closing, it will need to be shown before the mortgage will be funded.
Transfer of Ownership
Once the documents have been signed and the funds have been transferred, it is time to transfer the ownership of the property. The new deed will be recorded with the local county registrar’s office and you will get the keys to your new property.
At the end of the mortgage closing process, you will walk away with a new mortgage and a new home.
Mortgage Closing Process without a Property Purchase
If you already own a property, you may find yourself going through the closing process for a refinance. This process is essentially the same – with lots of documents to sign. But, instead of walking away with keys to a new piece of property, you get a new rate and term on your mortgage.
Help Your Mortgage Closing Process Go Smoothly with Closinglock
Closings are the most anticipated part of a new real estate sale or purchase. During this process, documents and funds are passed between parties to finalize the transaction. In our digital world, this information can find its way into the wrong hands.
Closinglock works to protect the buyer and seller from confidential information getting into the wrong hands using wire fraud protection, encryption, password protection, and more. Contact us today to see how we can help protect you or your clients.