Buying a new home can be an exciting experience. Unfortunately, the closing can seem a little daunting if you are unsure about what to expect during the closing process. Below is a simple guide as to what you can expect during the closing of your first home.
Knowing How Long the Process May Take
The process of closing a house is a complicated one and can take some time to perform properly. Don't expect to be able to move in shortly after your offer is accepted. If the seller does not request a longer escrow period, it can still take up to 41 days for the closing process to be completed. This length of time is typically the result of delays in the process, with the most common types of delays including transactional and financing issues.
Knowing Who Will Be Present During the Closing
While you may obviously expect both the seller and your's and their real estate agents to be present, there are also other officials who will need to be included in the process. There will be a representative from the title company, the lender who is providing the financing and a closing agent who will be brought by either the title company or the lender. Depending on the level of complication of the transaction, an attorney for you or the seller may be present as well.
Understanding Which Documents You Will Be Expected to Look At
You will be presented with a number of key documents during the actual closing and will be required to sign a number as well. The amount of paperwork can seem overwhelming, but your agent, the finance company and a representative from the title company will be there to answer any questions that you may have about each of the documents. You can better prepare yourself by understanding the purpose of each document before they are presented to you. Documents you are likely to see during the closing process include:
- Loan Estimate: The loan estimate will include the terms of the loan, the interest rate and detailed closing costs. You will be expected to verify that all the information in the document is correct.
- Closing Disclosure: This will outline the details of your mortgage, and you will be able to see the document before the closing, so any changes can be made if necessary.
- Escrow Statement: The statement will detail the payments that will be made from the escrow account during the first year of the mortgage from your lender. It will include taxes and insurance.
- Mortgage Note: This is your promise to repair the mortgage and what steps the lender can take if you fail to make payment.
- Deed: The deed to the property will provide the lender's claim against your home if you fail to pay.
If you are unsure about any of the closing process, talk to your real estate agent, so there are no surprises, and your closing can proceed as smoothly as possible.
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