FINANCING - CLOSING
WHAT HAPPENS AFTER I'VE APPLIED FOR MY LOAN?
Answer: It
usually takes a lender between 1-6 weeks to complete the evaluation
of your application. Its not unusual for the lender to ask for more
information once the application has been submitted. The sooner
you can provide the information, the faster your application will
be processed. Once all the information has been verified the lender
will call you to let you know the outcome of your application. If
the loan is approved, a closing date is set up and the lender will
review the closing with you. And after closing, you'll be able to
move into your new home.
FIND A MORTGAGE FOR YOUR HOME BY STATE:
WHAT MAKES UP CLOSING COST?
Answer: There
may be closing cost customary or unique to a certain locality, but
closing cost are usually made up of the following:
| Attorney's or escrow fees (Yours and your lender's if applicable) | |
| Interest (paid from date of closing to 30 days before first monthly payment) | |
| Property taxes (to cover tax period to date) | |
| Loan Origination fee (covers lenders administrative cost) | |
| Survey fee | |
| Recording fees | |
| First premium of mortgage Insurance (if applicable) | |
| Loan discount points | |
| Title Insurance (yours and lender's) | |
| First payment to escrow account for future real estate taxes and insurance | |
| Any documentation preparation fees | |
| Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable) |
WHAT SHOULD I LOOK OUT FOR DURING THE FINAL WALK-THROUGH?
Answer: This
will likely be the first opportunity to examine the house without
furniture, giving you a clear view of everything. Check the walls
and ceilings carefully, as well as any work the seller agreed to
do in response to the inspection. Any problems discovered previously
that you find uncorrected should be brought up prior to closing.
It is the seller's responsibility to fix them.
WHAT DO I GET AT CLOSING?
| Truth-in-Lending Statement | |
| Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing) | |
| Mortgage Note | |
| Binding Sales Contract (prepared by the seller; your lawyer should review it) | |
| Mortgage or Deed of Trust | |
| Keys to your new home |
WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?
Answer: You'll
present your paid homeowner's insurance policy or a binder and receipt
showing that the premium has been paid. The closing agent will then
list the money you owe the seller (remainder of down payment, prepaid
taxes, etc.) and then the money the seller owes you (unpaid taxes
and prepaid rent, if applicable). The seller will provide proofs
of any inspection, warranties, etc.
Once
you're sure you understand all the documentation, you'll sign the
mortgage, agreeing that if you don't make payments the lender is
entitled to sell your property and apply the sale price against
the amount you owe plus expenses. You'll also sign a mortgage note,
promising to repay the loan. The seller will give you the title
to the house in the form of a signed deed.
You'll
pay the lender's agent all closing costs and, in turn,he or she
will provide you with a settlement statement of all the items for
which you have paid. The deed and mortgage will then be recorded
in the state Registry of Deeds, and you will be a homeowner.
