As a first-time home buyer, you’ve probably heard about the exciting, long and strenuous process involved in buying a home. This includes the home search, negotiations, mortgages, inspections and insurances. Regardless of how hard it seems, what’s important is that you’re finally nearing the point of closing on your new home.
What’s a closing?
Closing on a home or any real estate property, is the process of transferring the ownership from the seller to the buyer. Closing on your real estate deal involves two main activities: obtaining your mortgage and title to the property.
Mortgage closing happens when the buyer finalizes and submits all documents needed when applying for a mortgage. Titling happens when the seller signs the deed and hands it over to the buyer. This signifies the official transfer of the property to the new owner. Final legal documents are completed with a real estate lawyer.
How does the closing work?
Here’s a more detailed answer on what happens when you close on a home.
Closing your mortgage application
We strongly recommend getting a pre-approved mortgage before you begin your search for a new home. The process becomes much smoother and faster because you’re prepared. Consult a mortgage broker to help with your mortgage application.
Closing day is the final step before that property finally becomes your home. Your closing date is the day you become the legal owner. During the contract negotiation phase, you, the buyer and the seller set a closing date, which will be stated on the agreement of sale.
At closing you’ll need to review and sign legal and financial documents, such as the agreement between you and the seller regarding the property and the agreement between you and your lender regarding the mortgage.
You’ll also need to pay your closing costs. These can either be rolled into the principal balance of your new mortgage or can be paid out of pocket.
Delivery of funds and document signing
The final document review and signing will usually take place at your real estate lawyer’s office, sometimes a few days before close.
On closing day, your lawyer will handle the following three tasks:
- Arranging for delivery of closing funds to the seller’s lawyer
- Registering the transfer and mortgage
- Releasing keys to you for your new property
Make sure to bring all documents you’ve received and signed throughout the home buying process, two valid IDs and of course… your payment. As you go through the process, make sure to take note of these:
- Review and sign all loan documents. Make sure that you understand all documents you’ll be signing.
- Provide documentation of your home inspection and insurance (if applicable).
- Bring a cashier’s check or proof of wire transfer for the amount of your closing balance (the buyer’s statement of adjustments).
4 Money-Saving Tips for Closing Day
1. Avoid closing on the last day of the month
Closing on the last day of the month gives you limited time to troubleshoot anything that goes wrong. For instance, prepaid interest on the loan accrues and is usually due during closing. If closing day will be pushed to a new month, the interest will continue to build up.
2. Make the final walk-through
The final walk-through allows the buyer to ensure that there won’t be additional damages on the property. It also assures that all agreements about the structure have been upheld. If you skip this step, you won’t be able to hold the seller responsible for damages, especially when the property has already been transferred to your name.
3. Refrain from big purchases for a while
Your lender has approved your mortgage application based on your current financial status. If you start making big purchases, this’ll be reflected on your financial information and may delay your closing.
4. Consult a mortgage broker
It’s finally yours!
You’ve come a far way to make it to closing day! At this point, all documents have been reviewed, signed and submitted. You’ve also secured your mortgage and the closing is officially complete. Congratulations! The home’s finally yours! It’s time to get your keys and move in!
As you aspire for closing day to arrive, make sure to have all of your ducks in a row. Daisy Raouph’s here to help make your mortgage application process smoother and get you to closing day in a hassle-free and efficient manner. Consult with us today!