What A Buyer Needs To Do And Bring To Closing Day

The closing day can be confusing and mysterious. So here's how to handle it.

Your Big Day

Spend at least two hours in the office of the closing agent. Although you might be able to get out in one, don't count on it. It would help if you ate a snack before you went and asked for water or coffee. Keep your eyes open as each of these forms is very important. You may be a little nervous and excited when you first walk into the room. The process will wear on you, and you may be tempted blindly to sign everything they give you. Do not do this.

You might be asking yourself why you should sign-in in person. We're all getting used to doing almost everything online. The federal government allows it now and may eventually make it a standard. However, for the moment, it is preferable to have physical signatures to make sure that everyone can read and verify the documents.

Who Will Be There?

Some areas of the country allow the seller and buyer to meet at closing. You won't see your seller in other parts of the country as each appointment is separate. The closing agent can be a title officer or an escrow company representative. It is important to remember that the closing agent acts as a neutral third party and has the necessary knowledge and training to complete the transaction correctly. The closing officer is a part of the original deal on the house. If this is your first home, it may be necessary to have your agent or attorney as well as the closing agent. An attorney is required in certain states.

What Should You Bring?

You must also have patience.

• Photo ID: 

  You must prove that you are who you claim to be. Then, you can use your current passport or driver's license.

• Cashiers or Certified Check: 

  This will cover any down payment you owe and closing expenses. Cash or personal checks are not acceptable. Because federal law requires you to know the exact amount of the check you need before settlement, you will be able to determine the precise amount. You will be told by the closing agent whether you require one or two checks and to whom they should go. To avoid any delays at the bank, wire funds instead of getting certified checks.

• Proof That Insurance Is In Force: 

  The closing agent will need to see proof of insurance. Although they may already have that, it is good to get your copy to make sure everything goes smoothly.

• Final Purchase Contract and Sales Contract: 

  In case you need to double-check a particular against closing costs.

What Questions Will You Be Asked?

Tell the closing agent what you want to do with the title if you have not already done so. These are the most common choices.

• Single Owner:

  A single, unmarried buyer of a home has the most straightforward task. The title is assumed in the name of the single owner.

• Joint Tenancy: 

  A married couple can buy a house together. Each spouse or partner can choose to share the title in joint tenancy. They also have the right of survivorship. The survivor takes full ownership if the partner or spouse dies. The survivor also enjoys tax benefits, regardless of marital status.

• Tenants In Common: 

  When two or three people buy a house together, they are called tenants-in-common. They can own different shares but can also sell their ownership shares independently.

Before you go to the closing, decide how you want to take title to your property. To learn more about the pros and cons of each type, speak to an accountant, real-estate attorney, or estate planner.

How Many Papers Are You Willing To Sign?

You can imagine more than you ever imagined. There will be two closings: one for your loan and one for the purchase of your home. The documents can vary depending on where you live, the details of your house, and other factors. However, it might be 24 for the loan and 12 for the real estate transaction. These are the documents you will likely encounter.

Documents Related To Closing Your Mortgage:

• Promissory Note: 

  As it sounds, signing this promissory note means that you agree to repay the amount you borrowed. The document also details the terms of your loan, including interest rates and prepayment penalties. Although it may not seem as romantic as saying "I do," it is essential. Before you put pen to paper, make sure it is thoroughly reviewed.

• Truth-In-Lending Statement: 

  Before you sign your mortgage contract, you'll be provided with a federal "truth-in-lending" statement (also known as Regulation Z). This document shows you your interest rate, annual percentage rate, and total loan cost over the loan's life. This document should be carefully reviewed to ensure there are no hidden surprises.

• Mortgage or Trust Deed: 

  Another big step. This document is a way to put your home as security for the debts you owe. Technically, the lender places a lien on your property.

• Monthly Payment Letters: 

  This document breaks down your monthly mortgage payment and shows how much goes towards principal, interest, taxes, and insurance.

Documents Related To Your Closing:

• Closing Disclosure: 

  This massive multipage document replaces the HUD-1. This form separates out the closing costs of both the seller and buyer. This form is required by law to be received three days before your closing meeting. It should be in the same format and format as your Loan Estimate after you applied for your Mortgage. This form should have been reviewed before you meet, but it is okay to make mistakes. It is worth rereading. There is a possibility that you won't be able to see the settlement statement if you close electronically on the house located in another country. Before signing, make sure you have read everything.

• Title or Warranty Deed: 

  This paper transfers title from the seller. It also includes the legal description of the property.

• Proration Papers: 

  explain how the seller and buyer will divide up property taxes, interest, and homeowner association dues for each month. The buyer and seller may also sign a contract that details how current utility bills will be divided.

• Statement Of Information: 

  This document could be called a declaration of identity. The title company uses this personal information to remove any confusion between you, and others with a similar name.

• Declaration of Reports: 

  This acknowledges that the buyer has reviewed and approved all inspection and survey reports made on the property.

• Abstract Title: 

  This abstract lists all records that affect the title of the property.