“What happens on closing day and after?” That’s a question we get asked often.
On closing day, you’ll sign documents to finalize the transaction and release the funds from your home loan. You’ll also receive digital or paper copies of all the signed documents plus the keys to your new home.
It seems pretty cut and dry, and for the most part, it is! Most of the loan processing work will be complete by this point.
In the whirl of excitement that you’re moments away from becoming a homeowner, you might get confused on what’s actually going on on closing day.
Here’s a quick break down of what you can expect on the day your loan closes.
What To Expect The Day Your Home Loan Closes
There are several “parties” involved in making your loan possible, and they all play a part in your closing, too. Some of these parties include your loan officer or broker, your realtor, lawyer, underwriter, title company, seller, the seller’s realtor, and you.
Each party makes sure that all is correct and complete with your loan. The final “package” can be quite extensive which is why you’ll receive it several days before the actual closing date, giving you the time to look it over.
There are several documents that need signing. They may vary somewhat, however, for the most part, these are the documents you’ll be signing on closing day:
Closing Disclosure: This contains your final loan terms and details about your closing costs.
Mortgage Note: This is essentially a “promise” to repay the loan.
Mortgage or Deed of Trust: Lays out the details of what happens should you fail to repay the loan.
The Deed: This legally transfers ownership of the property to you.
Closing day is also when you’ll pay the closing costs and your down-payment. Remember that both of these payments should be done with a certified check, not cash or personal check. Be sure to also bring a copy of your proof of insurance (don’t worry, we’ll remind you of all of this on closing day) and that’s it!
If your possession date is the same as your closing date, you’ll receive your keys then. If your possession date is different, you’ll know about it ahead of time. It’s noted on your purchase agreement and we’ll make sure you’re clear on all the closing date details before you sign.
These are other things that’ll happen after closing. They’re not directly related to your loan but just a few things to keep in mind.
Offers in the Mail. Home sales are public record so be prepared to receive lots of mailed offers for home services, legal services, and maybe even mortgage protection insurance.
You may find some of these offers useful but research before committing. There are scammers that will send you an offer appearing as if it came from a reputable lender or other mortgage service provider.
Possible Payment Changes. Terms of your loan won’t change, that is, unless you have an adjustable-rate loan or if you refinance. However, it may be possible for your payments to vary slightly due to changes in your escrow account.
For example, if the property taxes or insurance increases, your mortgage payments will also increase. Don’t worry about ever “overpaying.” If there are any overages in your escrow account, you’ll get a refund.
The home loan process has many moving parts right up to the very end, but we’re here to make it all clear and keep everything on track for you. You can count on us to be your trusted resource for all your home and property financing needs.