Your train has finally arrived at the station. Congratulations you have made it to the closing table after months of house hunting, jumping through the hoops for a successful loan process and mountains of paperwork.
Typically, this paperwork journey takes about 4-8 weeks on average from the moment you sign the purchase agreement.
3 Days Before Closing
At closing you will be signing a deed of trust, promissory note and a closing disclosure. The closing disclosure which will reflect purchase price, loan fees, closing costs, and all the final adjusted balances and credits such as prorated taxes, etc.
Don’t forget that along with your down payment which you can bring as certified funds on that day, or do via wire transfer. Bring a copy of your government issued photo ID and proof of homeowner insurance.
Closing costs will run you about 3-5% of the total sale price. You will be getting this from your lender in the form of a good faith estimate (GFE) 3 days before closing. This gives you time to shore up your funds and correct any errors you may see, including misspellings. This can delay your closing if not corrected immediately.
Check your walk-through checklist to make sure all necessary repairs were completed as per seller responsibility.
Ask how keys and property access will be arranged the day of closing.
Pro tip 1: Don’t sign the good faith estimate if it states an amount significantly higher than your loan estimate, or if the rate isn’t what you had agreed upon. Ask any and all questions you may have about the good faith estimate.
Plan on being at the title/ escrow company or wherever the closing is planned for, for a few hours. I have seen closing held up because the bank was waiting on an appraisal report before they could approve the loan, or your funds didn’t hit the bank on time and the closing would have to be re-scheduled. Be organized.
Worse, I have seen a loan denied last minute because the applicant’s credit scores were thrown out of whack when a $1000 credit card limit was maxed out. Thankfully this was easily resolved when they paid the $1000 cash to bring this back to equilibrium. But it took several calls to the credit reporting companies to reflect the positive credit score adjustment.
Pro tip 2: Once you have signed your purchase agreement, do NOT make any large purchases that upset your debt-to-income ratio like maxing out a credit card.
Lenders pull your credit report at the beginning of the approval process, and will be pulled the day of closing. You want this to be status quo. Keep your spending habits the same until after the closing.
In a nutshell on the actual day of closing, title is transferred to you upon transfer of your monies from escrow, then you receive your mortgage papers and pay the appropriate title and transfer fees recording fees and the deed gets transferred to your name.
On this closing day you are now the legal owner of your new home.