Chris Andaya
Once you have been pre-approved for a mortgage and have contacted a loan specialist, the process of purchasing your new home begins. The closing process, also known as settlement, is where ownership of the home is transferred from the seller to you. It involves a lot of documentation and money exchange, but being prepared and understanding the process can help alleviate the stress.
Preparing for Closing
After you and the seller sign the purchase agreement, you will have 30-60 days to prepare for closing. During this time, you will need to select a title company and/or real estate attorney, purchase homeowner’s insurance, purchase title insurance, meet all loan conditions, prepare to move, review the closing disclosure, and complete a final walkthrough of your new home.
Gathering Your Documents
Prior to closing, the closing agent (title company or real estate attorney) will send you a list of documents required for closing. The list may vary from state to state, but usually includes a homeowners insurance policy for the purchase property, a valid photo ID, a list of all your addresses within the last 10 years, a cashier’s check for closing costs and down payment (if not paid ahead of time), and your checkbook as a backup. If you have any questions about what documents you need to bring to closing, reach out to your title company and real estate attorney.
Who Needs to be Present at Closing?
As the borrower, you will need to be present at closing along with any co-borrowers on the purchase agreement. If you have a non-borrowing spouse, they may also need to be present depending on state and legal requirements. Verify with your real estate agent who needs to be present at closing.
Signing at Closing
On your scheduled closing day and time, arrive to sign the closing documents. The location, date, and time of closing are determined when you and the seller sign the initial purchase agreement. The closing date could change if all loan requirements are not met or if there are any outstanding issues that delay closing.
The closing documents include a lot of paperwork and signing. They include the closing disclosure, loan application, mortgage note, mortgage, title documents, deed, affidavits, initial escrow disclosure, and transfer tax declaration. Once you sign all documents, you will receive the keys to your new home!
File a Homestead Declaration
After closing, it is in your best interest to file a homestead declaration or exemption to register your home with both the federal and state governments as your primary residence. A homestead exemption can provide protection in three ways: exemption from a certain amount of property taxes, preventing the forced sale of your home in a bankruptcy situation, and keeping your surviving spouse in the home. In some states, a homestead is automatic, but always double check with your real estate agent or closing agent.
To file a homestead declaration, contact your county assessor’s office. If a real estate attorney is overseeing your purchase, they might include filing for a homestead in their fee and file it for you during the closing process.
Contact a Loan Specialist
If you have any questions about the closing process or are looking to get pre-qualified, contact a loan specialist. They can guide you through the process and answer any questions you may have.
