You’re closing the sale and taking that next step toward moving into your new home. It’s time to sign the papers that will make your mortgage official.
While congratulations are in order, it’s important to go into this last step with your eyes open, having investigated the costs you’ll be called on to cover and other vital details about the closing process.
How homebuyers and sellers close has changed in the past few years. With the advent of digital signatures, there isn’t a need for all involved parties to gather around a table and sign documents. While the number of participants won’t be as large as in years past, the event will still be a big moment for you, the buyer. When you show up for closing day, you’ll need your checkbook, proof of your homeowner’s insurance, a cashier’s check to pay for closing costs, (or documentation that you’ve made the wire transfer) and photo identification.
Review before you get to the table
The Consumer Financial Protection Bureau (CFPB) lays out a few essential steps to take before you even get to the table to sign the final closing documents. You will be provided with your Closing Disclosure form at least three days before the sale is closed. By reviewing that five-page document against loan estimates, you will be ready to sign with confidence.
Some of the closing costs on the final disclosure may be different than those on the estimate, and that’s normal. There are, however, some fees that, by law, must never change. Federal Title and Escrow founder Todd Ewing told The Washington Post that the difference is typically between $50 and $400. The list of expenses you’ll have to pay during the ownership transfer includes a loan origination fee, attorney fee, appraisal cost, title insurance and more.
The CFPB suggests that you also review the promissory note, your mortgage form and the deed. Some states require you to bring an attorney, but even if your state doesn’t, you may still want to, especially if you and another person are buying the house together. An attorney can ensure the ownership split is the way you envisioned it.
Close the sale
You shouldn’t feel forced to proceed at any part of the actual closing. You’ll be presented with many documents to sign, all of which should reflect the conversations you’ve already had with your agent or loan officer. If you’re buying your first home, it may be best to have a trusted advisor with you at the closing. No matter who you bring, you should be comfortable with everything you’re signing. After all, it is your right to understand the documents presented.
Little discrepancies can come up during closing. For instance, if an agreed-upon repair hasn’t been carried out, the seller may work an extra payment into the deal to compensate. Major changes could lead to the replacement of the Closing Disclosure. As each detail is hammered out around the table, you can slow the process to receive more details.
It’s better to walk away without signing than to get locked into a harmful agreement, but breaking things off may mean consequences, such as the loss of deposit and fees. Good communication and research leading up to the final closing can help you avoid such a last-minute issue. With all the details satisfactorily resolved, it’s time to sign and make the home officially yours.