Buying a home can be a confusing process if you do not know what to expect. This series is to help you navigate the home buying process to ensure that you have a smooth, headache-free experience.
When you decide to buy a home, you spend a ton of time searching for the perfect house in what seems to be a haystack of listings and then one day, boom! The ‘the one’ falls into your lap. You negotiated a deal you’re happy with, and secured a mortgage — but wait, there is more. Just one more critical hurdle lies ahead: the home closing. Also known as “settlement” or “escrow,” this is a day when all involved parties meet to make this transaction official.
Here’s what to expect from the closing process, step by step.
1) Preparing for Your Closing
If you’re getting a loan, thoroughly review your HUD-1 settlement statement. The HUD-1 settlement statement outlines your exact mortgage payments, a loan’s terms, and additional fees you’ll pay called closing costs. Compare your HUD-1 to the estimate your lender gave you; make sure they’re similar and ask your lender to explain any discrepancies. You will receive your HUD-1 three days before closing so that you have plenty of time to check it over.
2) What to Bring to your Closing
You’ll want to bring all of your paperwork; including, proof of homeowners insurance, a copy of your contract with the seller, your home inspection reports, anything the bank required to approve your loan, and a government-issue photo ID.
You will also need your down payment, which you can find know on your disclosure form. Be sure to ask before closing whether you should wire transfer those funds or if you’ll need to bring a cashier’s check. Also bring your personal checkbook to closing, since that’s typically fine to pay smaller fees and may come in handy in case any unforeseen expenses crop up.
3) What to Expect at the Closing
While you are there, you will see a few people. Who will be present during your closing depends on the state in which you live. In the state of Tennessee, you can expect your real estate agent, the representative from the title company and occasionally a representative from the bank or lender where you got your loan.
You will also have to wait for title clearance. Most lenders will require a title search of public property records to make sure there aren’t any liens or issues with transferring the property into your name during the closing.
Be prepared for some mild hand cramping, because you will be signing a lot of documents.
Don’t be surprised if a few things to go awry at the closing, like someone gets stuck in traffic, a document is missing, or a name is misspelled. But don’t stress, simply do what’s in your power to make the day go off without a hitch.
If all goes well, you will eventually leave your home closing with a stack of documents and the keys to your new home.