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Lesson 4: Closing the Loan
Congratulations! You're about to become a homeowner. The "closing" is
when the finalized loan documents are signed, and the mortgage funds are paid
out. Once your loan is approved and cleared for closing, you and the seller (s)
agree upon a mutually convenient date to meet and officially transfer ownership
of the home to you.
The
closing meeting is typically attended by the buyer (s), seller (s)/building
developer, attorneys, real estate agent (s), a representative of the lender and a
closing agent.
Here are some
things you can do ahead of time to ensure a successful
closing:
- Fulfill
any conditions specified at the time of your loan approval.
- Obtain
homeowner's insurance. This required insurance protects you against loss or
damage due to theft, fire, or certain weather-related hazards. In some areas, it
may also be necessary to obtain flood insurance.
- Resolve
title questions. If your title search turned up other liens on the property,
these will need to be resolved before closing can occur.
- Conduct
a final walk-through of the home to ensure any agreed upon repairs have been
completed by the seller.
- Review
the final estimates of your closing costs.
- Prepare
a certified check or money order - not a personal check - to cover your down
payment and closing costs. Make sure you can meet the conditions of your
mortgage commitment.
At the closing, you'll receive and
review some very important documents. This is not the time to be shy! If you
have questions about the paperwork, just ask. And if you spot an error, say so -
and don't sign the document until the issue is resolved.
Here are some documents
you'll receive or review at your closing:
HUD-1 Settlement Statement
- This is an itemization of all funds and costs paid by
the buyer and seller either at or prior to closing. If you ask, you have a right
to review the HUD-1 in advance of closing.
Truth-In-Lending (TIL)
Disclosure- This document provides important
information about your loan. It includes the APR, finance charge, amount
financed, total of payments, and payment schedule.
Deed of Trust or
Mortgage - This document states that Chase
receives a lien on your property as security for your
loan.
The Note - The note is your binding legal agreement to make payments
to Chase according to the terms of your mortgage.
The Keys - The symbol of your new home ownership.
Congratulations!
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