When purchasing a home, there are a number of hoops that you have to jump through including finding a home that’s right for you, making an offer that’s accepted and finding a loan with ideal terms. Closing day is the last hoop when you purchase a home. This is when the property changes hands from the seller to you. It includes writing a check for your down payment and signing various documents and then the keys are handed over. Of course, there is a lot more than this, mostly with what occurs behind the scenes.
The background activities when you purchase a home includes paying net funds to the house seller, paying other firms that are involved with the closing, the transfer of money to any prior lender and a final title search before filling all the closing documents.
The closing meeting usually includes the seller, buyer, lender, real estate agents and a representative of the title company. Some buyers may ideally have a real estate lawyer with them. The role of the attorney is to go through the documents and explain what each is one is for in a comprehensible manner.
You will also get a Truth-in-Lending statement that’s required by law to be issued to all loan applicants who purchase a home. The statement will include the annual percentage rate (APR) or rather the cost of the mortgage. The APR rate is usually higher than the interest rate you agreed upon and that’s because it includes fees, points and other costs of the loan you’re taking to purchase a house. The Truth-in-Lending statement ideally explains the terms of the loan such as the amount financed, finance charge as well as the total of the payments.
Another document you will come across in closing is the Mortgage Note. This is simply a contract with the lending institution that you’ll make payments in accordance with the loan terms. It includes the payment dates, penalties for late payments and where all the payments are to be sent.
The Mortgage itself is a legal document that secures the mortgage note and guarantees the lending institution holds a claim to your property until you finish the loan payments. It will stipulate the kind of insurance you need to hold when you purchase a home and sets out the terms in case you default on the loan.
The Title Deed is signed, notarized and then transferred to you. It is imperative to ensure that the correct names are on the deed when you purchase a home. To ascertain that your closing is stress-free and seamless, get in touch with Cities Title Services today!