Everything.
The date of your closing will be set in your sales contract. Technically speaking, there are two closings, one on your home mortgage loan and another for the home sale transaction. Ask your lender or real estate agent about how closings are handled in your area. In some places, particularly in western states, no formal meeting between buyer and seller is required. An escrow agent handles all the paperwork and disburses the funds.
Although the process varies depending on state law and local real estate customs, certain steps are standard:
1 - Sign the Bottom Line. The settlement agent reviews the settlement sheet and asks you and the seller to sign it. Next you review and sign the other loan documents, including the Truth-in-Lending Statement and your mortgage note. This is your final chance to ask any questions or clear up any inconsistencies about the loan terms or closing costs, before you sign these documents.
2 - Cut the Check. Once you and the seller agree that everything is in order, you'll write a check to cover the closing costs on the loan and the balance of funds due, if any.
3 - Set Up the Escrow Account. Usually the lender is responsible for paying your homeowners insurance and property taxes from an escrow or reserve account. Your lender charges you enough in your monthly payments to cover the costs, and deposits the funds in the account.
4 - Take the Keys. This is what you've been waiting for, the payoff to all that saving, hard work and research. You have a new home!
New-Home Closings and Lender Inspections
Things work differently if your home is still under construction when you apply for your mortgage.
Find out when the building inspector has issued the certificate of occupancy. That's when the lender will inspect the home to make sure it was finished and constructed according to plans. It's a good idea to be patient and work with the lender and builder on any unfinished items or repairs, even if you're eager to move into your new home. By protecting their investment in your mortgage, the lender is protecting you. If there's a dispute over unfinished or unsatisfactory items, the lender might withhold part of the mortgage until the work is complete. This is called a Holdback or Completion Escrow.
Hitting the books
Steps you'll need to take to prepare for settlement...
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