The mortgage closing process is basically about transferring the property title to the buyer from the seller. These are the steps involved in the process:
Pre-closing
This is a checklist that ensures you are prepared for the actual mortgage closing process:
- Homeowner insurance purchase that begins from the day you move in to the new property
- Requesting the bank for a cashier’s check for the down payment on the house and any other closing costs as specified by the lender’s lawyer
- Ensure that the amount on the check is arrived at after deducting the earnest payment deposit given to the seller
- A final walk-through cum inspection of the property to ensure that it is in good condition and everything is working
The Mortgage Closing Process
You are ready for the mortgage closing when the loan is approved, you get the cashier’s check, and the house is ready for you to move in. You will meet with your real estate agent, the seller and their agent, and an escrow agent, for thorough scrutiny of all the paperwork.
After reviewing the documents, the next step is to transfer the property to the buyer. The procedure is different in different states, so be sure to check the local law – it is a good idea to have a real-estate lawyer on your side so that you ensure compliance with all laws and regulations.
Reviewing Your Mortgage Documents
During the mortgage closing process, several documents will be reviewed:
- Mortgage Note and Mortgage, or Deed of Trust: This declares that you know the details of your debt, along with a promise of repayment. It also contains the foreclosure rights of the lender if you don’t repay as promised.
- Closing Disclosure: This contains a final statement mentioning the loan structure, interest rates etc., including any changes made since the application process began, as well as actual costs vis-à-vis loan estimate
- Declarations and Affidavits: To clarify your rights and duties as a new homeowner
Once all of this is signed and filed, the seller hands over the keys of the house to the purchaser.
Tips for Successful Mortgage Closing Process
You need to make sure you don’t get cheated, and that you get a whole mortgage closing process. Make sure the documents are reviewed in detail by your attorney and the mortgage lender on the closing day and clear all queries you have. It’s your right to get the best financial arrangement from the lender, so ensure that they answer your questions in detail. Only when you’re satisfied that everything is on the up-and-up, go ahead and sign.
It is important to be aware of all changes and ask questions when in doubt. Be very careful about the Closing Disclosure, and jot down the changes since the issuance of the loan estimate. A small difference here and there is fine, but a drastically different amount warrants a detailed explanation. You have the right to walk away from a deal if you feel it’s not good enough. You may lose out on a good home, but that doesn’t mean you have to pay way more than what you need to.