After Months of Mortgage Calculations, It's Closing Time!

By Barbara Marquand
Mortgage Credit Problems Columnist

After months of saving for a down payment, shopping for a home, using free mortgage calculators to determine monthly payments and closing costs, and finally qualifying for a loan, you're now days away from home ownership.

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All that's left is the closing--that important day when you close the deal on a mortgage and home purchase. Here's what to expect and how to approach it:

Schedule Plenty of Time

Usually a closing takes roughly an hour, but sometimes it can take longer if there are complications. This is an important milestone, so set aside plenty of time so you can concentrate and get the job done. Make sure the closing is scheduled before the locked-in interest rate expires on your mortgage deal and before you're supposed to move from your current home.

Bring Your Money

The closing agent will list everything you owe, such as prepaid taxes and the remaining down payment. You also may pay a portion of closing costs at this time and set up an escrow account to pay property taxes and insurance. Find out beforehand how much money you'll need, and bring a certified check for that amount.

You will also show proof that you've paid your homeowners insurance policy premium.

Understand the Paperwork

There will be plenty to read. Among the documents you'll review:

  • HUD-1 Form or Settlement Statement, which lists all the services provided and fees charged.
  • Truth-in-Lending Statement, which discloses loan details, such as interest rate, amount financed and total cost of the loan.
  • Mortgage note, which is your promise to repay the loan.
  • Mortgage or deed of trust, which gives the bank the right to sell the property and apply the sale price against the amount you owe if you default on the loan.
  • Binding Sales Contract, which is prepared by the seller and should be reviewed by your real estate agent or an attorney.

Make sure all the documentation is correct before signing. You've worked hard to get to this point; this is not the time to let down your guard.

The Final Details

The seller will provide a signed deed giving you title to the house. The deed and mortgage will be recorded in the state Registry of Deeds. And lastly, you'll get the keys to the house and officially be a homeowner. Congratulations on a job well done!



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