If you’re reading this, hopefully, you’ve found your perfect home and now you are preparing for the closing day. The closing day, also known as “settlement” or “escrow,” can be a very exciting but also a little nerve-racking day. This is when all involved parties will meet to make the transaction official. We, at Investment Title, wanted to share with you what to expect during your closing process.
1. How to Prepare: You will want to review your closing disclosure form prior to the closing, especially if you’re getting a loan. The best way to do that is by reviewing your Closing Disclosure settlement statement. This outlines your exact mortgage payments, interest rate and closings cost. The closing costs typically range from 2% to 7% of your home’s price. Always ask your lender questions if there is any uncertainty. You’ll receive your Closing Disclosure three days before closing, leaving you a few days to review prior.
In addition to reviewing your Closing Disclosure, you’ll want to do a final walkthrough. The buyer’s contract usually allows for a walkthrough 24 hours before closing. You should do this to make sure the previous homeowner has vacated and to make sure the home is in the expected condition. Make sure any previously revealed problems were fixed and repairs were made. If you notice anything out of sorts, bring it up with your agent and the seller as soon as possible.
What to Bring: Paperwork. Paperwork. Paperwork. It’s a lot but it’s all important. Bring a proof of homeowner’s insurance, a copy of your contract with the seller, home inspection report, anything the bank required to approve your loan, and government-issued photo ID. If you were just married and changed your last name, make sure your ID matches the name that will appear on the property’s title and mortgage.
Money is another essential piece to the closing. You will know how much your down payment and closing costs are prior to closing day. A personal check won’t work so before closing find out whether you should wire transfer the funds or if you should bring a cashier’s check. Personal checks are fine to pay smaller fees, bring that just in case something you didn’t notice before pops up.
What to Expect: A lot of people will be at your closing, but don’t worry. Consider them your cheerleaders for the time being! Who will be present depends on what state you live in but there are a few key figures are typically present. Expect to see the home seller, the seller’s real estate agent, your own real estate agent, buyer and seller attorneys, and a representative from the title company. Sometimes a representative from the bank or lender where you got your loan will show up.
Before the closing and before you can own your home or the title, a title search is required of the property. This is where Investment Title comes in. The title search will help discover any liens or issues with the transferring the property into your name. The title commitment issued prior to closing will set forth any requirements that need to be satisfied before the property can be transferred to you. The title company representative will provide a rundown updating the title commitment on the day of closing to make sure that the searches have all been made as current as possible. If you’re reading this and thinking “wait, what is title insurance?” then consider reading out blog Breaking Down Title. This will clear it all up for you.
Get your hand ready because you are going to be signing a lot of papers, especially if you have a mortgage.
You may experience a few bumps during the closing. It’s best to be prepared for everything. All you can do it prepare yourself for the day and expect that everyone else is involved is doing the same. We highly recommend not scheduling anything else for this day just in case the closing runs over or changes time.
Once you’ve signed all your papers, thanked all of those involved, you’ll have yourself a set of keys, a pile of documents and a home!
We hope you found this information useful and that you consider Investment Title for any future transactions.