Very few people get excited when faced with the prospect of paperwork. In fact, many consider it something of a necessary evil. However, there are definitely times when completing paperwork is an integral part of achieving a significant milestone. Buying a home is a perfect example. When you attend closing, there will be plenty of paperwork to shuffle through, but each document that you sign will take you a step closer to official homeownership. What do you need to know about the closing paperwork for a house before your closing day arrives?
Closing Paperwork for a House
Closing is when the ownership of a house officially changes hands (source). Sometimes called settlement, it is when closing costs are paid and the closing paperwork for a house is signed. Basically, it’s the simultaneous exchange of the funds and documents needed to complete the transaction. The process can be a bit of a blur for those who are unfamiliar with it. Learning what to expect beforehand can help you feel more confident and make it easier to revel in the thrill of owning a new home.
What to Bring to Closing
To ensure the meeting goes smoothly, make sure that you bring the necessary items to your closing (source).
First, you need to bring a government-issued photo ID like a driver’s license or passport. You’ll also want to bring any outstanding paperwork for the title company or loan officer. In addition, you’ll need a cashier’s check made out to the title or closing company that covers any closing costs not being rolled into your loan. If you opt to use a wire transfer to pay these costs, bring proof of the transfer with you. Although personal checks and credit cards won’t be accepted for the expected closing costs, it’s wise to have them on hand for any small, last-minute costs.
Patience will also be a useful commodity at the closing table. It takes time to read through all the paperwork, but it’s important to understand what you’re signing. If you don’t understand, ask for clarification before affixing your signature.
Who You’ll See at Closing
Who will attend the closing? The requirements for closings vary from state to state, so it depends on your location and the details of the transaction. According to Better Money Habits, the group that sits down at the closing table might include any of the following:
- The buyer
- The seller
- The buyer’s real estate agent
- The seller’s real estate agent
- The buyer’s attorney
- The seller’s attorney
- The notary public
- The closing agent
The Closing Paperwork
The number and type of documents that you have to sign at closing will depend on the lender and the kind of loan that you’re using to fund your home purchase. While the stack of paperwork can be intimidating, don’t rush through it. Take time to review each document, make sure that you fully understand it, and that the information listed is accurate and matches your expectations. Within the closing paperwork for a house, there are three documents that are particularly important (source):
- The Closing Disclosure: This is an itemized list of all final charges and credits for both the buyer and seller. You should receive a copy of this form at least three days before your closing so that you have time to review it and compare it with your Loan Estimate, the form that you received after applying for your loan that listed the loan’s estimated interest rate, monthly payment, and closing costs. If anything has changed substantially, ask for an explanation before proceeding with the closing.
- The Promissory Note: This document outlines the amount of the debt and the terms of the loan, including the initial interest rate, the terms of any rate changes, and the details of how and when you will repay the loan. It serves as proof of the debt and a means for the lender to collect or transfer it.
- The Deed of Trust or Mortgage: This is your agreement to put your new home up as collateral for the loan. It’s recorded with the deed to the property as a lien.
Whether you’re buying, renovating, or refinancing a property, you can rely on the experts at PrimeLending Twin Cities to offer professional guidance and personalized service. We work hard to make the home loan process as easy and comfortable as possible for the people we serve. Discover how we can help you reach your housing goals. Contact us today to schedule an appointment.