Closing on Your Mortgage Loan

The last step you must complete before moving into your new home is closing on your mortgage. Although this is the last step, it is certainly not the “least” in terms of the anxiety a home buyer may experience and doubts about the home selection. There is an awesome amount of paperwork to be completed which can be both exciting and frightening all at the same time.

Once your loan has been approved, there are a number of tasks which need to be completed for the closing of both your loan and the sale of the home.

The closing is when the home’s ownership legally changes hands and is typically done so by means of the purchaser obtaining a loan. Below is a list of typical action items to be completed for the closing meeting. If there was a previously signed loan commitment letter and sales contract, both you and the seller are bound to move forward with the transaction.

Action Items for Closing:

1. Set your Closing Date.

2. Inspect the Commitment Letter to make sure all areas of the letter have been satisfied.

3. If desired, arrange for your attorney to be at the closing – especially if the attorney was involved in the sales contract phase of the mortgage process.

4. Find a Closing Agent.

5. Ensure Title Search has been performed and that you have proof of purchasing title insurance BEFORE the closing.

6. Certify Septic Tanks and Wells.

7. Request a Plot Plan or Property Survey.

8. Arrange for all Required Inspections such as Termite Inspection, Building Code Inspection and Final Walk-Through Inspection. Closing may be delayed if problems are detected.

9. Acquire Homeowner’s Insurance.

10. Arrange for your down payment – if less than 20%, you may need to look into obtaining Mortgage Insurance.

11. If the home is newly built, a Certificate of Occupancy should be obtained from the builder.

There are also many costs associated with the closing on your home. In the sales contract, it is important to be clear about who will be paying for the closing costs – the buyer or the seller. Typical mortgage and required government costs include:

1. Loan Origination Fee
2. Loan Discount Points
3. Credit Report Expense
4. Appraisal Charge
5. Escrow Accounts
6. Prepaid Interest
7. Property Taxes
8. Recording Fee and Transfer Taxes

The closing on your home is an exciting and exhilarating time. Ensure the process is a smooth one by going through all pre-closing action items to avoid unwanted surprises. Any such surprises could delay the move into your new home.

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