Mortgage Loan Closings - What to Expect
Now that you have been approved for a mortgage loan and have received the commitment
letter from the lender, there is one final step to complete before you can call the home yours: the mortgage loan closing.
The closing will usually take place at a local title or escrow company, but some lenders close the loans in their offices, and others send their instructions and documents to their attorney or yours to conduct the closing.
At the loan closing, there will be several mortgage loan documents to review and sign, and sometimes, the seller will be there to transfer ownership to you. There are many documents that you might see at the closing: Title Insurance Policy, Termite Inspection and Certification, Flood Insurance, Certificate of Occupancy or Building Code Compliance Letter, Homeowner's Insurance, Survey or Plot Plan, but the most important documents that you will be signing are the HUD-1 Settlement Statement, the Truth in Lending Statement, and the Deed of Trust / Mortgage.
The Settlement Statement itemizes all charges imposed on the borrower and seller for a real estate transaction. It gives each party a complete list of incoming and outgoing funds, including those paid prior to the closing, which are marked POC, which means Paid Outside of Closing. The Truth in Lending Statement, which you will have already seen when you first agreed to the terms of the loan, will also be signed at the closing. It will have been updated to reflect the final rates associated with the loan, listing the APR, Finance charge, total number of payments, amount financed, and other fees. This document also contains information about the penalties you may incur if you fail to make one of your payments. The Mortgage or Deed of Trust will be signed to assure security for the lender in case you cannot repay your loan by using your property as collateral.
If you wish to bring your attorney to the loan closing, you may do so, and in some states, it is required. It is a good idea to familiarize your attorney with the mortgage at hand so they are prepared for the day of the closing. A closing agent who represents the lender or title company will conduct the actual closing of the loan. Before you sign each document, the closing agent should briefly explain the nature and purpose of each and give you or your attorney the opportunity to inspect it before signing. You may be able to set up an automatic monthly payment plan for your loan through your checking account at the signing. Also, it is usually necessary to come to the closing with a certified check for all closing costs, including the down payment.
If you are unable to attend the closing, contact your lender to discuss your options. Sometimes, you may assign the Power of Attorney to someone you trust so that they can sign the documents for you, or you may also be able to have the documents mailed to you beforehand so that you can sign and fax them to the closing agent.
Once all the documents are signed, congratulations!, the loan and home are officially yours.
Mortgage Loan Closings - What to Expect
By: Mary
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