Finalizing a deal and closing your mortgage can come with plenty of obstacles, especially if it’s your first time. In some cases, major setbacks can arise that result in delays and unnecessary stress.
However, understanding common complications and preparing yourself ahead of time should make your closing go through without a hitch.
Go Over Your Paperwork
During the closing process, you’ll sign several documents. These include the HUD-1 settlement statement, which lists all the costs related to the sale of the home; the final Truth-in-Lending statement, which details the costs associated with your mortgage loan and its interest rate; the mortgage note, a document stating that you promise to repay your mortgage loan and spelling out what recourse your lender can take if you fail to do this; and the mortgage or deed of trust, which provides you lender with a claim against your home if you don’t follow the terms of the mortgage note.
Once these documents are signed and you present your cashier’s or certified check to the title company, the title agent will make copies of the documents you signed and any other paperwork about your new home for you. You’ll also receive the keys and garage door openers to your new home.
To save time, you should double and even triple check all pertinent documents to ensure that they have been prepared correctly. Check the personal information and home address for any misspellings. Look at payment amount, interest rates and any other numbers for errors.
If anything looks questionable, contact your lender as soon as possible to have the issue resolved. Be sure to get everything organized and you may want to make copies just in case something is lost. To take it one step further, you can scan and save documents digitally onto your computer or on a Cloud-based platform.
Write Down a List of Questions
As your closing draws near, you will probably have some questions for your lender and real estate agent. Writing these questions down and contacting the appropriate party in advance should clear everything up. If you need to take care of something, you can handle it before the finalization and save yourself from frustration.
Take a Final Walk Through
Although you will probably be quite familiar with your new property, it’s a good idea to give it one last walk through a day or two prior to closing your mortgage. This is a good time to check to see if the seller has lived up to their end of the deal and that there are no glaring issues. Make sure that there hasn’t been any recent damage and that plumbing and electricity are working correctly.
If they were supposed to make renovations or repairs, everything should be completed. If the seller agreed to leave you with certain appliances, these items should be accounted for. In the event that the circumstances aren’t what you agreed to, you will need to contact your real estate agent immediately.
Transfer Utilities Ahead of Time
Before the actual closing date, you will want to transfer all utilities accounts to your name. This is especially important if you plan on moving into the property immediately after closing your mortgage. Just ask the seller for a list of all utilities companies and contact each one. If there are any problems, they can be addressed and there will be less on your plate once the deal is finalized.
Know Your Closing Costs
There can be several additional fees that contribute to closing costs. Some of which include inspection charges, attorney’s fees, a loan origination fee and escrow deposit. Consequently, you need to know precisely what you will owe in order to close.
According to Zillow, “home buyers will typically pay between about 2 and 5 percent of the purchase price of their home in closing costs.” That’s why you should have this money ready to go beforehand and have quick access to it.
Bring Your I.D.
Every buyer needs to bring a government-issued photo I.D. Most people will bring a driver’s license. The closing agent will make copies of these pieces of identification.
The closing process can be a nerve-wracking one. You are, after all, making what is probably the biggest purchase of your life. Knowing how the process works and what is expected of you can ease some of this stress. And if you have any questions during the closing, make sure to ask them. This is not the time to be timid.