Your loan has been finally approved! And you have been probably dreaming about the day you can move into your new home. Congratulations – you are getting closer. But before you think on changing locks or plan ways to decorate your home, you must complete the last step in the mortgage process: the closing.

Closing: The Final Stage

Closing is when you finalize the details of your home buying transaction – the property title is transferred from the seller to the buyer. The person responsible for this process is the closing agent, who will act independently and impartially to ensure that all necessary transaction details are complete. Be aware that the closing process may be different, depending on the state where the property is located.

The closing agent usually works for a Title company, and helps the buyer, the seller, and the lender finalize the sale of a property. This person will ensure that all documents are accurate, complete, and signed. Once everything is in place, the closing agent will arrange, collect, and disburse the money required for the transaction, such as the escrow deposit, down payment, or required fees.

After your loan is approved, make sure you are ready for the closing process. The following sections explain what to expect, as well as provide an overview of the documents you need to sign.

Get Ready for Closing

The term closing basically means that the escrow account that was initially established to buy your home, will now be closing. During the closing period, you will have to read, authorize, sign, and date many legal documents.

While the closing process could be long and stressful, you can get ready and organize to ensure your closing is fast and smooth. Make sure you do the following before you sign.

· Confirm the date, time, and location where closing will take place.

· Obtain the final closing amount and bring a cashier’s check to cover the closing costs and fees.

· Bring copies of all document you have received throughout the process, including the final estimate of closing costs, appraisal report, homeowner’s insurance, and inspection report.

· At least 24 hours before closing, make sure you do a final walk-through of the house to make sure all repairs are done, and that there is no damage or change in the condition of the property.

· If a down payment is required at closing, request a cashier’s check from your bank to cover the payment. Personal checks are normally not accepted.

· Bring your driver’s license or other government identification.

The Closing Mortgage Documents

Make sure you become familiar with the different documents you will be required to complete and sign at closing. The following describes some of these documents.

Promissory Note

This is a legal document that contains a written promise that you will pay back the loan amount, during a specified time. Promissory notes are typically recorded as public records and include the names and signatures of the lender and borrower. They also detail the total amount of the loan, the interest rate charged, the terms of the loan, and any penalties the lender may want to charge for late payments.

Deed of Trust

A Deed of Trust is a legal document that you will sign at closing. Depending on where your property is located, the Deed of Trust may be referred to as a Mortgage. This document is the security for the amount loaned to you to finance your property. It protects lenders if you fail to pay the loan, giving them rights to foreclose on your property.

Closing Disclosure

The Closing Disclosure (CD) document is required by federal law and discloses how much you will pay in fees and other costs when buying your home. This document reveals your loan details, such as the mortgage loan amount, interest rate, percentage rate, taxes, payment schedule, and any final loan charges that are due at the time of closing. There are many costs associated with buying a home, be ready to review them, compare, and ask questions. In addition, this document will show any modifications in your interest rate or credit score points that were made during the loan process.

Make sure you compare your initial Loan Estimate (LE) with the Closing Disclosure (CD) document. Although, some changes in your original LE document are normal, make sure to inquire if there are any major changes on the CD document. Be aware that you have three business days to look over the CD document, before the closing date.

Certificate of Occupancy

This is a legal document issued by your local government, to certify that your home meets all building codes and rules. This document is usually required for new constructions to ensure the structure is suitable for occupancy. Certain jurisdictions may also require this document for homes that have gone through major renovations.

Right to Cancel Form

One of the documents included in your loan package is the “Notice of Right to Cancel,” also known as the “Rescission Document.” Under federal law, you can cancel the loan transaction within three business days after you sign the loan documents. Be aware that rescission only applies when you are refinancing a mortgage loan, not when you are purchasing a new home. After you sign the closing documents, you cannot cancel the loan.

Close with Confidence

It is important that you close with confidence. Make sure you ask questions if you do not feel certain during this process. You must review all documents thoroughly and verify that you are not charged for items that you have already paid (credit reports, appraisals, or inspections). If you find any discrepancies, make sure you talk to the closing agent to correct any inconsistencies before you sign.

Closing on your home can be stressful, unless you prepare yourself to make your closing smooth and easy. Make sure you understand the details of one of the biggest transactions you are about to make. Take all the time you need to read and understand your closing documents, no matter how long it takes. Do not hesitate to ask before you sign. Your future home is almost yours!

Are you ready to complete your home buying journey? Our loan officers at ACG Funding are ready to help you start the process of getting your new home.