Before
Closing
A number
of
things
need to
happen
between
commitment
and
closing.
So, as
soon as
you hear
that
your
loan is
approved,
you'll
need to
begin
checking
on some
details.
Set
Closing
Date
Your
sales
contract
probably
indicated
an
estimated
date of
closing;
now
you're
ready to
set an
actual
time and
place
for the
meeting
to take
place.
Make
sure the
settlement
will
take
place
before
the loan
commitment
(and any
rate-lock)
expire,
but
leave
time for
all the
necessary
documentation
to be
assembled.
Most
lenders
will
need 3-5
days
notice
to
prepare
the loan
papers
and get
them to
the
closing
agent.
If any
repairs
were
agreed
upon in
the
sales
contract,
make
sure you
also
allow
enough
time for
them to
be
completed.
Miscellaneous
Items
Various
details
have to
be taken
care of
regardless
of
location.
These
will
require
documentation
at loan
closing.
Some
responsibilities
will
fall to
the
seller;
others
will be
your
own. The
following
are
usually
required:
Payment
of Costs
Once all
papers
are in
order,
you (and
maybe
the
seller)
will pay
whatever
remaining
points
and fees
are due,
as well
as your
down
payment.
The
lender's
check
for the
amount
of the
mortgage
is also
submitted
to the
closing
agent.
Transfer
of
Property
At this
point,
you will
have
completed
the
purchase
process,
and will
be given
the keys
to your
new
home.
After
the
meeting,
the
closing
agent
will
record
the
mortgage
and deed
in your
name
with
local
government
records.
Once
this
legal
transfer
is
complete,
funds
will be
dispersed
by the
agent to
the
appropriate
parties.
Documents
You will
receive
a number
of
important
documents
at the
closing
meeting.
(1)
HUD-1
Settlement
Sheet
This is
the
itemized
list of
closing
costs
that
your
lender
made
available
to you
the day
before
your
closing.
The
closing
agent
will
fill out
some
information
on this
sheet,
which
both you
and the
seller
will
then
sign.
(2)
Truth-in-Lending
Statement
You
received
this
document
a few
days
after
applying
for your
loan. It
is the
statement
which
outlines
the cost
of your
loan and
gives
you the
APR
(annual
percentage
rate),
which
may be
slightly
higher
than
your
loan's
interest
rate
since it
spreads
closing
costs
over the
life of
your
loan. It
also
defines
the
terms of
your
loan and
the
amount
of
payments.
(3) The
Mortgage
Note
The
mortgage
(or
promissory)
note is
legal
evidence
of your
promise
to repay
your
loan
according
to all
agreed-upon
terms.
It
details
the
amounts
and
dates of
payments,
as well
as the
penalties
you may
suffer
if you
fail to
make
payments.
(4) The
Mortgage
The
mortgage
is the
legal
document
which
gives
the
lender a
claim
against
your
house if
you fail
to abide
by the
terms of
the
mortgage
note.
The
mortgage
restates
the
terms
laid out
in the
note,
and
lists
your
responsibilities
under
the
terms of
the
agreement.
Although
you have
possession
of the
property,
the
lender
shares
ownership
with you
until
your
loan has
been
fully
repaid,
and can
demand
full
payment
of the
balance
of the
loan or
foreclose
on the
property
if you
default
on your
loan.
Some
states
use a
deed of
trust
instead
of a
mortgage.
Signing
this
document
conveys
property
title to
a
trustee
until
the loan
is
repaid.
(5)
Affidavits
You will
be given
a number
of other
documents
to sign
at
closing.
Some are
required
by law;
others
are
lender
requirements.
For
example,
your
lender
might
have you
sign an
affidavit
of
occupancy,
stating
that the
property
will be
your
primary
residence.
Your
lender
will be
able to
explain
to you
any
documents
you will
be asked
to sign.
(6) The
Deed
This is
the
document
which
transfers
ownership
to you.
The deed
will be
in your
name and
will be
signed
by the
seller
at
closing.
You'll
receive
a copy
of the
deed at
closing,
and the
original
will be
sent to
you
after it
has been
recorded.
