Closing-Day on your new house can invite an awful lot of butterflies into your stomach. After all the work of house hunting and mortgage negotiating, it all comes down to final signatures, the big check and high hopes that nothing will go wrong at the last minute. Nerves might feel a little on edge.
Palm State Mortgage wants every detail of Closing-Day on your new home, to be perfect and smooth. After all, this is the day you are about to close the deal on one of the most expensive purchases you will make in a
lifetime. At Palm State Mortgage Company we believe you will feel more confident about facing your closing procedure if you know about the documents and paperwork involved.
That is what this blog concerns today. So much happens in a house closing, too much for one blog post. Although we discussed the closing in previous years, we have more details to share with you in this update.
Plus we will be posting a Part II to our coverage of this important day in your life, in the next issue. For today, we will be narrowing the scope of our lessons to focus mostly on the paperwork involved.
Key Survival Secret Number 1: A Test of Endurance and Patience
On closing day, you must face the mysterious and formal appointment to close your deal for a house. We hope you had a nice snack before you came to the title office because a smooth closing-day relies on a lot of patience and signatures. We can’t make it fun for you, but we can explain the paperwork behind it.
Key Survival Secret Number 2: Know Your Cast of Characters (whom to expect at your meeting)
When you meet to take ownership of your house, you will sit down at the conference table with a highly professional cast of characters:
The Closing Agent, who might work for the lender or the title company,
Your Real Estate Attorney and perhaps the lender’s attorney also.
Both sides, buyers and sellers, might also have attorneys. “It’s always a good idea to have an attorney present who represents you and only you.”
The Home Seller.
The Seller’s real estate agent.
The Title Company representative, who provides written evidence of the ownership of the property.
You, also known as the mortgagor.
The lender, also known as the mortgagee.
Closing Day Key Survival Secret Number 3.
In spite of the fact that you are facing these people in a formal mahogany room with plush carpet and a carved table, know that Palm State Mortgage Company has helped you come this far and you have nothing to fear.
We don’t want you to start blindly signing papers full of tiny print and traps.
We want to help you understand what you are signing. Fears will disappear and you can stay calm and cool if you know what is going to happen in your Closing. Basically, you can focus on your two jobs in this scenario for the approximate 2 hours the appointment will consume.
Buyer’s Job A: Signing Legal Documents.
You will be signing an agreement between you and your lender. It will list your terms and conditions of the mortgage.
Likewise, you will sign an agreement between you and the seller of the property which transfers the ownership of your home to you.
Palm State Mortgage Company advises you to read everything carefully and cautions you to avoid signing forms with large blank spaces or lines. You would not sign a blank check, would you?
Buyer’s Job B: Paying closing costs and escrow items.
Experts say, “There are numerous fees associated with getting a mortgage and transferring property ownership. Usually, the borrower pays these fees with a check at closing.”
They add, “Some fees can be added to the loan balance, or the borrower can pay a higher interest rate and have the lender pay the fees.”
About the Closing Agent: The Man or Woman Who Keeps all the Paperwork Flowing
The closing agent (from the cast list above) conducts the settlement meeting like an emcee or your host for the day. He or she assures that everyone has signed their documents. Plus they must be legally and officially recorded. She or he also makes sure you or you and the seller pay your closing fees and escrow payments.
Closing-Day Survival Secret Number 4: Understanding the Closing-Day Documents
Palm State Mortgage reminds you that the essential closing documents changed in 2015l. So if you have bought a home previously, you might not recognize some of the changes. The advent of the Know-Before-You-Owe mortgage rule reduced some of the paperwork often associated with a closing a loan. It also enriched the transparency and clarity of the document. In fact, the new laws replaced 4 confusing documents with two brand new streamlined documents.
Everything You Might be Afraid to Ask about the Deal and Your Closing Disclosure Document :
This very important document lists all of the actual fees, costs and credits associated with completing your loan. The lender provided it to you 3 days in advance of the closing meeting.
And there’s a reason; you need to take some time to study the deal. Everyone concerned wants you to have time to look at the details. Likewise, as you look at this paper, you can make sure that the loan terms and costs line up with your Loan Estimate.
Closing-Day Survival Secret Number 5: Perusing (and Signing) the Promissory Note
Not only is this the place where you see details of the loan, but where you find out what happens if you fail to make your payments. Take a good look at the due dates for payments and where to send them.
Likewise, you will see an explanation of the legal actions if you fail to make your payments on time. This is a very serious sheet of paper. When you sign it, you agree to repay the loan in the manner specified.
Closing-Day Survival Key Secret Number 6: Deciphering the Deed of Trust
As a borrower, you will have certain rights. But also you will have responsibilities. The Deed of Trust explains both. As you sign it, Palm State Mortgage wants you to realize you are giving the lender the right to take back the property through foreclosure if you cannot pay as agreed.
Closing-Day Survival Secret Number 6A: Cherishing The Deed
Caution, you might get chills and goosebumps when viewing this paper. It will mean you are a documented, bona fide homeowner. The house is yours.
With this paper, the seller transfers ownership over the house to you.
In front of you also, you see all the names of all the buyers on it.
Keep in mind that a third-party trustee will hold this deed until you have paid it completely.
This document is not really yours until you have completely paid for the house. You will, however, be given a copy of the deed at closing. You might want to frame it and hang it over your new fire place.
Be sure you keep all Closing Papers in a safe place. You will need them at certain times. Income Tax is a perfect example.
Closing Day Survival Secret Number 7: Affirming Your Affidavits and Declarations
These papers legally declare that the information you provide is true. For example, you will sign one that states the property will be your primary residence. Moreover, when you sign it, you verify that proper repairs were accomplished prior to closing.
Congratulations! Now you are a homeowner. Thanks for reading our blog and we hope you will return for part II of our story of Survival on Closing Day.