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Wow! You're about to own a home. The "closing"
is when you sign the finalized loan documents and the mortgage
funds are paid out. Once your loan is approved and cleared
for closing, you and the seller will set a date to officially
transfer ownership of the home to you.
The closing meeting is typically attended by the buyer, seller
or building developer, attorneys, real estate agent(s), a
representative of the lender and a closing agent.
Do these things ahead of time and you will ensure a successful
closing:
- Fulfill any conditions specified at the time of your loan
approval.
- Obtain homeowner's insurance – this insurance protects
you from loss or damage due to theft, fire or certain weather-related
hazards. It may also be necessary to obtain flood insurance
in your area.
- Resolve any title questions – if your title search
turned up additional liens on the property, these must be
resolved before closing can occur.
- Do a final home walk-through to ensure that agreed upon
repairs have been completed by the seller.
- Review the final estimates of your closing costs.
- Have a certified check or money order prepared to cover
your down payment and closing costs. No personal checks!
Make sure you can meet the conditions of your mortgage commitment.
You'll receive and review some very important documents at
the closing. Ask questions about the paperwork if you are
unsure of anything! If you spot an error, say so - and don't
sign the document until the issue is resolved.
Here are some documents you'll receive or review at your
closing:
- HUD-1 Settlement Statement: An itemization of all funds
and costs paid by the buyer and seller either at or prior
to closing. You have a right to review the HUD-1 a day in
advance of closing.
- Truth-In-Lending (TIL) Disclosure: This document provides
key information about your loan, including the APR, finance
charges, amount financed, total of payments, and payment
schedule.
- Deed of Trust or Mortgage: This document states that your
lender receives a lien on your property as security for
your loan.
- The Note: The note is a binding legal agreement to make
payments to your lender according to the terms of your mortgage.
- The Keys: You own a home. No go and enjoy!
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