WEOKIE Federal Credit Union By WEOKIE Federal Credit Union • October 24, 2020

Closing on a Mortgage: 101

Congratulations, you’re almost to the finish line to buy your new home! Closing on the house is the final step and is the day you become the legal owner of your new home. Here’s some tips on what to expect and how to prepare for the big day.

What Should I Bring on Closing Day?

To make sure everything goes according to plan, you’ll need to be sure to bring a few things to your closing appointment. Your title company representative and mortgage loan officer usually provide a checklist to make sure you are prepared. WEOKIE specifically requires:

  • A valid ID
  • Borrowers may want to bring the latest Closing Disclosure provided by the lender. This gives them a chance to compare any changes that may take place up to the day prior to closing.
  • A cashier’s check payable to the title company if funds are required to cover the down payment, closing costs, and escrows as applicable. (Some of these may also be built into the loan if you prefer.)

 

What will closing day look like?

On closing day you will review and sign documents but it’s not all that happens. The process is managed by your real estate agent or mortgage loan officer, with someone who specializes in handling real estate closing and preparing the correct documents and the loan will usually close at a title company.

If you bring all the required documents for closing day, here’s what to expect:

  • You’ll pay any remaining closing costs, as listed in your Closing Disclosure.
  • The seller will sign documents to transfer property ownership.
  • You will sign…
    • Loan estimate information. This outlines your loan, terms, rates, and closing costs.
    • Closing Disclosure. This outlines the terms and costs of your mortgage.
    • Initial escrow statement. At closing, many buyers have to pay money for future taxes and insurance up front, this money sits in an escrow account during the first year of your mortgage until the mortgage company uses them to pay those bills.
    • Mortgage note. This document is your promise to repay your lender and has information on what the lender can do if you don’t pay.

 

Before Closing Day

Yes, there are a couple things you need to have completed before your closing day. The average process for closing on a house takes 41 days. That is if there are no delays with the closing process. In an article by Dave Ramsey, 32% of all transactions encounter some type of delay or hang-up before closing.

Trulia lists some things that you can do before closing on your home which include…

  • Having a home inspection. As soon as your offer is accepted and you’re under contract to purchase your home, have a home inspector go through the house.
  • Renegotiate or have the seller fix problems.
  • Do a final walkthrough. Just before you go to your closing, do a final walkthrough of the property to make sure that anything that needed to be fixed, meets your expectations.
  • Transfer utilities to your name. Get in touch with the utility companies well in advance of your closing day. You don’t want to be in the dark on moving day.
  • Purchase homeowner’s insurance. Homeowner’s insurance protects your property against theft and damage caused by nature. And your lender will require it before closing. WEOKIE offers homeowner’s insurance through MemberHaven.

Your mortgage lender will do the following:

  • Processing your loan. They will be reviewing your full application and making sure all of your financial information checks out. They may ask for additional documents during this time.
  • Review your home appraisal. Your home appraisal will confirm that the value of the home is not less than the amount of your loan.

The documents will then be sent to the title company for closing.  

Closing Costs

Closing costs are the fees third parties charge when you finalize purchasing your home. These costs will include the home inspection bill, premium for homeowner’s insurance, appraisal fee, credit report charges, attorney expenses, and so on. Some of these fees will need to be paid before the actual closing day. Dave Ramsey states that on average, you’ll pay 3-4% of the purchase price of your home in closing fees. For example if your home costs $150,000, you might pay between $4,500 and $6,000 in closing costs.

WEOKIE: your one-stop-shop for everything homes!

When you’re ready, we have several services and resources to help you find a home, (HomeAdvantage offers cash rewards when you buy or sell a home using a group of highly skilled realtors.) We have multiple types of loans and we can even assist you with insurance for your home. We want to make every step in your home-buying experience as easy and as affordable as possible.

Complete our
 online form, or give us a call today at (405) 235-3030 or 1-(800) 678-5363 to discuss your dream home goals.