Buying a home or other real estate can be one of the most exciting (and stressful) times in a person’s life. There are myriad details that need to be paid close attention to in purchasing any piece of real estate, all of which will come together at the closing if the transaction is handled properly.
There are a number of questions which are often asked by purchasers and sellers alike regarding the closing process, and knowing the answers to these questions allows the parties to properly prepare for closing and ensure the process goes smoothly.
What is a Closing?
Closing is the process by which title to the property in question is legally transferred from the seller to the purchaser. Often, possession of the property is also conveyed at the time of the closing, although under certain circumstances the seller will retain possession for a short period of time after the closing.
Do I Need to Attend the Closing?
It is not necessary for either party to actually be at the closing if they have granted another person their power of attorney or have taken measures necessary to execute a closing via mail. However, it is usually recommended that all parties appear in person at closing to facilitate the process and to quickly deal with any problems that might arise.
Where Till The Closing Happen?
The closing process usually occurs at the office of the title company that is handling the real estate transaction. Prior to closing, the title company should have done a title search to confirm that the seller is, in fact, the owner of the property, discover any liens or mortgages on the property, and to identify any defects in the title to the property.
What do I Need to Bring to The Closing?
Although every closing will vary, generally, the purchaser will be required to provide the following items at closing:
Cashier’s check for the total amount of closing costs and any down-payment not already provided.
Proof of homeowner’s insurance.
Final approval of inspections that were conducted of the property.
What Will Happen At The Closing?
The closing will consist almost entirely of the review and execution of various documents. These documents will include, but are not necessarily limited to:
Closing Statement (HUD-1 Settlement Statement). The HUD-1 is a standard form that itemizes services and fees charged to a borrower by the lender or broker when applying for a loan for the purpose of purchasing real estate.
Truth In Lending Statement. The truth in lending statement is a document that shows the effects of the closing costs and interest rate throughout the full term of the loan. The statement is required to contain the annual percentage rate charged, any finance charges, the amount of money being financed and the total number of payments that the borrower will make over life of the loan as well as the date on which each payment is due.
Mortgage Note. The mortgage note is a written promise to repay the lender according to the stated terms. The mortgage note states the amount of debt, the interest rate, and holds the borrower(s) personally responsible for repayment of the borrowed amount.
Deed. The document that legally transfers of ownership of the property from the seller to the buyer.