Congratulations! You are about to close on your new home. The closing process is where you will complete the final round of paperwork needed to purchase the home. When it’s over, you’ll walk away with keys to your new home (unless there is a special provision in the sales agreement for allowing the seller more time to vacate the property). The following is information that might be helpful as you enter the final phase of the purchase process.
At the closing, you will present your Homeowner’s Insurance receipt. This will show that you have the necessary insurance on the property. You will then move on to review of the HUD-1 Settlement statement. Your closing agent will go over the settlement statement to verify that everything in the agreement is as it should be.
HUD-1 Settlement Statement
This form is required for compliance with the Real Estate Settlement Procedures Act (RESPA). Once you have signed off on the HUD-1, you will move on to closing costs. As agreed upon, the buyer and seller will provide the closing agent with certified checks to cover the cost of the closing.
At this point, you will go over any remaining documents. The agent will have both the buyer and seller review information for accuracy and obtain the appropriate signatures.
An escrow account will be established for the buyer. This account will cover property taxes, homeowner’s insurance, private mortgage insurance (PMI) if required, and any interim interest.
Execution of Mortgage Documents
This is the point in the closing when the buyer will sign all documents required by the lender. These include the note and security instruments that will include either a deed of trust or mortgage. These documents show that the buyer pledges the property as security for the mortgage loan. The mortgage check is presented and a warranty deed is given to the buyer.
At the end of the process, the seller hands over the keys to the home. New homebuyers should note that it is a good practice to replace all locks in a new home to prevent those who have duplicate keys from having access to your home and belongings. In addition to keys, the seller may have items such as warranty information for appliances, garage door openers, etc. to pass on to the buyer. After this has been done, the escrow or closing agent handling the closing will complete the recording of your purchase. This includes recording the warranty deed and related security instrument.
If you have agreed to take immediate occupancy, then you are then free to enjoy your new home! In the event that you must wait, alternate arrangements will be made for you to obtain the keys to the property.