Questions and Answers
What is a closing?
Closing, which is also known as “settlement” or “escrow,” is the event where the title to a property is transferred from seller to buyer. Closing is typically held in an office, such as that of an attorney, title agent or title insurance company, and involves the completion of all the necessary paperwork to finalize the agreement between buyer and seller, as well as the collection of all funds required for the transaction.
Once the necessary documents are prepared, signed and recorded at the local courthouse or county recorder’s office, the title is considered transferred to the new homeowner.
What are closing costs?
Closing costs are all costs required to close the real estate transaction. They can include (but are not limited to) surveying fees, property taxes, title insurance premiums, attorney fees, real estate agent commissions, points, loan origination fees, private mortgage insurance (PMI), and the balance of your down payment.
Prior to closing, you should review your final closing statement or HUD-1 statement (whichever is in use in your area) to ensure that all the calculations are correct and that you have been given all the credit for deposits and other agreed upon buyer and seller credits. Also recheck all lender, title and escrow fees to make sure they are accurate.
What will happen during the closing process?
You might do a final walk-through of the home.
You’ll go to the closing location and show your picture ID to the settlement agent.
You’ll present your paid homeowner’s insurance policy, or proof that the premium has been paid.
Your settlement agent will review the closing statement/HUD-1 with you, showing all items for which you have paid.
You’ll get inspection reports and warranties.
You’ll sign the mortgage/security deeds, agreeing that if you don’t make payments to the lender as agreed, the lender is entitled to sell your property and apply the sale price against the amount you owe.
You’ll sign a mortgage note, which is your promise to repay the loan.
You’ll typically be given the title to the house in the form of a deed, signed by the sellers.
You will be asked to sign a number of other documents required by your lender.
The deed and mortgage will be recorded in the local courthouse or county recorder’s office, sometimes called the Registry of Deeds.
You’ll get the keys to your house!