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The Mortgage Closing Process

Buying or selling a home is a very rewarding experience, but, at the same time, it can be one of the more stressful and tenuous experiences in a person’s life as well. The closer and closer it gets to the closing day, the closer and closer it is to being done with. The stress will be gone (albeit temporarily—owning a home comes with its own stresses) and you will be the proud owner of a new house. Not only will you be the owner of a new home, but also the owner of a new future. When closing time finally comes around, it is a good idea to familiarize yourself with the mortgage closing process. It will be a busy day; there may be quite a few people, and more than a few papers to sign, and it is easy to get lost or confused in the process. So, keeping that in mind, here is a short rundown of what awaits on that fateful mortgage-closing day.

Your Last Chance

It is very important to keep in mind that the mortgage-closing day will be your last chance to make any changes to the mortgage policy. This is important because if you are feeling uneasy about anything in the mortgage policy, now is the time to speak up. Ideally you would want to address those problems early on, but if there is still any kind of lingering doubt or apprehension regarding the mortgage policy, then this is the last time ever to relieve those worries.

What You Need To Do

The first step, which is the collecting of all the relevant papers and documents you need for closing day, should be done at least the day before closing—if not earlier than that. Ensuring that you have all the things you need on closing day will help speed along the mortgage closing process, which can sometimes be tedious and slow. The most common documents you will need for the mortgage closing process are the following: good faith estimate, contract, proof of title search and insurance if necessary, flood certification, proof of homeowners and private mortgage insurance, home appraisal and inspection reports. It will not be uncommon for a person to have to consult these documents at some time during the mortgage closing process.

When the closing day arrives, the most important part will be the signing of the mortgage documents, which are the legally binding documents that will transfer ownership of the house from the seller to the buyer of the home. There are two transfers that take place on closing day: the transfer from seller to buyer of the home, and the transfer of the mortgage loan funds from the home insurer/ mortgage lender to the buyer of the home who took out the mortgage loan from them. After the papers are signed and everything in transferred between the various parties, the next step is for the borrower/ new homeowner to pay all the fees that are associated with the new agreement. These fees include things like closing costs, escrow items and other out-of-pocket fees.

There may be tons of people present on closing day. These people can include closing agents, lawyers from both parties, a title company representative, a real estate agent and other representatives from the mortgage company and lenders. These people’s primary duties are to ensure that the mortgage closing process goes as smoothly as possible and that everything is done up to the standards that their employers demand of them.

The Documents

The closing documents are most commonly the Hud-1, the TILA, the Mortgage note, the Deed of Trust and the Certificate of Occupancy. The Hud-1 is a detailed list of all the costs associated with the mortgage transaction. The final TILA statement outlines the mortgage policy and all the fees and interest rates associated with it. A homebuyer will receive a TILA statement when they first take out the loan, the finalized version is usually identical unless some major changes have been made to the mortgage loan between the first TILA and the final TILA statement. The other documents are basically promises and legal affirmations of the buyer’s intent to pay back the mortgage loan in the way it is stated in the final TILA statement.

Gary Meyer writes for http://www.personalhomeloanmortgages.com, where borrowers can find the most current mortgage rates.

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