One of the last apps in buying and finance in a home is known as the closing. The closing can also be called a settlement and this is when all parties in the mortgage loan transaction will sign and complete all of the necessary documents.
Once these documents have been find in finalized, you become primarily responsible for the mortgage loan. It is essential to become fully aware of the documents in which you’ll be signing the you know what you should be looking for prior to signing.
If you will be purchasing the home with a loan, the time in which you close on your loan as well as the closing of the home will typically happen during the same time. When the closing has completed, you’ll be legally required to pay the mortgage.
The closing may include one or all of these entities:
– Your personal realtor or real estate agent
– An escrow company
– Your title insurance company
– The seller’s lawyer
– Your personal lawyer
– The lender if they decide to attend
Depending upon the state in which you live, all of the parties may sit at a table and sign the documents at one time. However, if the closing should take several weeks, the parties may sign the documents separately. It is now possible to sign documents electronically either in advance or directly at the closing table. In some cases, a closing may be completed through mail or online.
Regardless of where the closing take place or who is there, there are several essential documents that will be signed that will impact the financial aspects of your life.
Before you sign anything, it is absolutely essential that you read and fully understand all of the documents presented to you. Never sign a loan document if it is different than you expected it to be. Never sign a document if you find any types of errors, do not understand though terms completely or will be unable to make the payments.
Be certain that you understand how your payments may possibly change over time. When you acquire an adjustable rate mortgage, it is possible that payments will increase over time, and you must know how they can change and by how much. Even having a fixed rate mortgage it is possible that the monthly payment can increase due to changes in your insurance or taxes.
Three days prior to the closing, you should receive a Closing Disclosure, which will fully lay out the specific terms of the loan as well as an itemized list including all of the fees that are associated with the closing. Be certain to fully take the time to review the Closing Disclosure, and review it with your Loan Estimate to ensure that all the terms are what you agreed to. If you believe there are any errors or mistakes with the Closing Disclosure, be certain to contact your lender as soon as possible.
What to expect during the closing:
You’ll receive a packet all of documents.
The vast majority of these documents you’ll be expected to sign or at least receive. These documents will include:
– The promissory note, it states that you promised to fully repay the mortgage loan to the lender.
– The closing disclosure
– The actual mortgage, which is also known as deed of trust or to security instrument. When you sign this document, you acknowledge the fact that a lender can foreclose on the property if you fail to repay the mortgage.
– The deed, a document which transfers the ownership the property to you legally.