Buying A Home Step 10: Closing!
The last week or so of a transaction can feel like a whirlwind. It’s an exciting time! Now it all comes down to signing a ton of paperwork, packing up your current home, getting your down payment and/or closing costs wired over and waiting impatiently for your keys. Once you get final loan approval, there are just a few final steps before you get to open the door to your new home.
- Disclosure document waiting period. Once the final loan approval is given, a set of documents will be sent to you for review from your lender. The law requires that you receive those documents 3 days prior to closing. Be sure to review the documents in their entirety so that you can ask any questions you may have & discuss the forms with your agent and lender.
- Final closing statement review. This is a big one. It’s easy to get a bit complacent when getting ready to close on a home. There’s so much paperwork and everyone pushes you to sign off as quick as possible. When it comes to the financial aspect of your loan, it’s important to understand what you’re agreeing to. This statement will breakdown prorated taxes, HOA dues, prepaid interest, PMI, etc. in addition to the purchase price of the home, loan amount and any concessions negotiated during the transaction. The cash due at closing is the total money you will need to have wired to escrow to close the transaction. Remember that your earnest money was a deposit and should be applied to the total due at closing.
- Final walk through. You get one last chance to take a look at the home to ensure that nothing has changed since you did your inspection and gives you an opportunity to ensure that any work orders that were requested were in fact completed.
- Signing with escrow. Signing your loan docs can take place a few days before closing. It’s important to remember to bring your drivers license since a notary will be present for signing. The stack of paperwork can feel overwhelming. While the notary will do their best to ensure that you know what documents you are signing, they are not authorized to go into detail regarding the terms of your loan. Your agent will typically try their best to be at the signing table and having your loan officer there can help ensure that any last minute questions get answered right away.
- Closing! It’s here. It’s here! First thing in the morning, escrow and your lender will handle funding the loan. The bank transfers the money to escrow. Once the funds are received, the deed is then taken to the county for final recording. This typically happens in the afternoon. Sometime between 1pm and 6pm, final recording numbers will be released from escrow. This is when keys can finally be transferred!
A few things to keep in mind:
- Utilities – most utilities need to be transferred into your name by you. Escrow will often take care of any utilities that have the right to lien on the property such as water and sewer. You’ll want to confirm with your agent or escrow officer what utilities have been transferred over for you.
- Final closing statement – this will be emailed to you and your agent within about 24 hours of closing on your home. It’s the final financial statement.
- Condition of the home – unless you specifically asked for cleaning services, the home will be transferred over in the same condition you saw it when you entered contract. Some people are used to rentals where cleaning and painting is completed before move in. Not when you buy a home. It’s always a good idea to have a locksmith stop by to change the locks. There is no way to know that all keys were left behind by the previous homeowner.
- 1st mortgage payment – your lender should provide a coupon to send in a check for your 1st payment just in case you do not receive a statement in time. Once you receive your 1st statement, you can set up autopay if you’d like.
- Sale of mortgage – most people are surprised to find out that their mortgage can be sold even before their 1st payment is due! Don’t be. Loans can be sold multiple times while you own your home. If you’re concerned about the notice you receive, feel free to reach out to your lender for confirmation.
You did it ! The process of buying a home can be extremely stressful but it all becomes worthwhile the moment you get your keys and start moving in. Buying a home is a huge accomplishment and you should feel proud of yourself. Be sure to celebrate and know that you’re now investing in your future.
Lastly, don’t forget to ask your agent to send over quarterly value updates so that you can keep a good eye on your equity. Knowing the value of your home can help ensure that your insurance is sufficient, your property taxes are not too high and that you know what your options are at all times (refinancing, selling, home equity loan).
Congrats! Now go celebrate, you deserve it.
Please feel free to check out the other steps.
Step 1: Determining Your Budget | Step 2: Hiring An Agent | Step 3: Hiring A Lender | Step 4: Viewing Homes | Step 5: Making A Strong Offer |
Step 6: Offer Acceptance | Step 7: Inspection Negotiations | Step 8: Appraisal | Step 9: Final Loan Approval | Step 10: Closing!