Buying A Home: 7 Step Series
We’ve made it through our 7-step series on the home buying process. If you are reading this article, then you may already be in the closing process or you are still getting prepared to buy your first home. In either situation, it’s important to know what happens on closing day.
In case you missed the first 6 steps, here is a link to each previous post on the Moreira Team Blog:
Step 1: Getting Your Finances in Order
Step 2: Hiring a Realtor®
Step 3: Getting Preapproved for Your Home Loan
Step 4: Are You Ready to Start Your Home Search?
Step 5: How to Make Your Home Purchase Offer More Attractive
Step 6: Understanding the Home Inspection and Appraisal Processes
What Exactly Does “Closing Day” Represent?
Now, we are at that point where you have completed the first 6 steps of the home buying process and you are approaching closing day. What does the closing really mean and what should you expect when this day finally comes?
During the closing process, your mortgage lender will be finalizing the underwriting for your home loan. You should have already been preapproved for your mortgage (Step 3, very important!) and things go smoothly with the home inspection(s) and appraisal (Step 6). If not preapproved when you start the closing process, you may experience additional delays or roadblocks as your financial situation gets reviewed by the lender.
Once the lender has officially approved the loan, the closing day is scheduled. This is the day when you sign all the final documents of the contract to close the transaction. It’s also the day when you get the keys to your new home!
Buying A Home – Documents Required Prior to Closing Day
A few days before closing day, you should receive the closing documents for review. There will be many important details included within these documents, including:
- Mortgage Loan Terms (interest rate, monthly payments, down payment, etc.)
- Closing Costs (inspection Fees, title Fees, Realtor® commissions, etc.)
- Prorated Property Taxes
- Prepaid Homeowners Insurance Fees
- Homeowner’s Association Dues (if applicable)
When you are buying your first home, you will likely have a lot of questions when looking over these documents. Please consult with your buyer’s agent and mortgage representative. You hired them to help and provide professional guidance, so utilize their expertise when you need it most. Don’t go into closing day confused about what your costs and responsibilities are.
How Are Closing Costs Paid?
Your primary responsibility as a home buyer will be to pay your end of the closing costs prior to closing day. These closing documents will break down everything you need to cover before the transaction can be finalized. You will need to get a cashier’s check from your bank or arrange a wire transfer directly to the closing agent or title company. At long as your payment is received at the closing attorney’s office the day before. Personal checks will not suffice in this situation!
Closing Cost Calculator
Closing Cost Details
Down Payment / 20%
All information and results provided by this Closing Cost Calculator are estimates only. They will in no way accurately reflect actual closing costs. This calculator is to be used only to establish and estimate of closing costs. There are many unique factors that will affect the actual cost.
Loan TypeVA FHA Other
Closing Cost & Fees$0
Escrow & Other Expenses$0
Total Due at Closing$0
Title Search & Lender Title Insurance
Attorney & Closing Fees
Loan Cost Totals
Government Recording Fee
Up Front Mortgage Insurance
Escrow Homeowners Insurance
Escrow Property Taxes (3 months)
Other Cost Totals
Document Signing and Notarization
On closing day, you will be physically signing a lot of documents in order to complete your real estate transaction. Your signature should be as consistent as possible and all the documents will then be notarized by a licensed notary public. Make sure you have multiple forms of identification with you (driver’s license, passport, birth certificate and/or social security card). Buying a home requires a ton of paperwork. Though some things are digitized these days, certain forms and documents must be signed and notarized in person. The good news is that signing all these documents is the easiest part of the whole home purchase process. Excitement should easily get you through closing day as you get ready to pick up your keys.
Other issues to resolve prior to closing day include transferring the utilities to the new home and acquiring a homeowner’s insurance policy. However, those should be completely long before closing day. If you are working with a good mortgage lender and real estate agent, you should be well ahead of all these steps!
If you are ready to buy a home and get preapproved for your mortgage loan, contact the local mortgage experts at Moreira Team today!