These are the three most welcome words when it comes to buying a house. When loan underwriting utters that magic phrase, loan officers, buyers, and real estate agents heave a deep sigh of relief. The deal is done, which means no more papers to sign, no more prying questions, no more spending your nights tearing the house apart to find obscure documents, and no more being a renter. But the deed is not officially done. You still have to grab your blue pen and get ready to sign on a lot of dotted lines. Take a look at what you can expect to happen during the process.
Getting to the Closing Table
Before you get to the finish line and sign your closing papers, though, think about how you got there, starting with your initial loan request. Your main job during the time your loan is still in underwriting is simple. Move as quickly as you can to honor document requests, answer questions, and do anything else that is needed to get you to the closing table. No matter how silly you think the doc request is, you just have to jump through the hoops as fast as you can.
Your Closing Disclosure
You have no doubt seen a blizzard of mortgage disclosure documents since you started the closing process. You’ve been given initial disclosures and then redisclosures. The sheer volume of paper can easily make first-time buyers dizzy. But, once you’ve made it through all that starting paperwork—along with the inspection and appraisal—you’ll receive your final closing disclosure a least three days before closing.
Closing Disclosure Changes
Closing costs, escrow amounts, interest rates, and cash to close are all added to your closing disclosure. This will look a lot like your initial loan estimate. You’ll want to compare these two documents to see what has changed since your first estimate. Other costs that can change from your first loan estimate to the closing disclosure include:
Prepaid interest totals.Initial escrow account deposits.Fees for third-party services that the lender does not require.Recording fees (by a maximum of 10%).Fees for certain required services if you chose a third-party provider from the lender’s approved list of providers (by a maximum of 10%).
You could also see some costs change if you were to take out more credit (say, for a car loan) since your initial estimate or your credit changed in some other way. The amounts on your closing disclosure will be close to the loan estimate, but there could be some big changes, and those costs can add up.
Who Will Be at the Closing Table?
The exact setup of your mortgage closing will depend on your state’s laws and how the parties involved handle the process. In some cases, you may even be able to close remotely, without ever setting foot in the title office. On closing day, you’ll meet with any or all of these parties:
Your real estate agent and the seller’s agentThe sellerA person from your title companySomeone from the escrow companyYour attorney or the seller’s attorney (if your state requires this or you request it)Your lender
Signing Your Closing Documents
Once all parties are together (if your state requires this), you’ll need to be ready to do a lot of signing and, of course, hand over your cashier’s check to pay your down payment and closing costs. The papers you’ll sign at the closing table should mirror your final set of mortgage disclosures (and they should be fairly similar to your original set of disclosures, too). Someone will guide you through each document, explaining what it means, where to initial, and where to sign. Once the closing papers are signed by you, any co-signers on the loan with you, and the seller, they will be faxed or scanned to your lender’s closing department. In some cases, these documents are needed prior to funding your loan and paying the seller. In other cases, the funds will have already been wired and will be waiting with the closing documents. Once the papers are signed, and the loan is funded, you are officially a homeowner. Your agent will hand over the keys, and then you can go check out your new home.
