After dozens of open houses, home showings and emails from your real estate agent who would forward home listings that fit your preferences, you finally found the right home.
You've done everything right with getting home inspections and finding out about the history of the house, as well as any liens that might hold up the process. Now it is time for the final stage of purchasing the house: the closing process.
The closing process will be your final meeting you with the home seller to transfer ownership of the house into your hands. It will also be the day you take out the checkbook to make payments toward the closing costs, down payments and other fees that are your responsibility. Here are the basic steps of the closing process once the seller has agreed to the deal.
Gathering All Necessary Documents
You will need on hand certain documents so the closing process can proceed. Before going to the meeting, obtain proof of homeowner's insurance, proof of mortgage insurance if you obtained a mortgage loan, the Loan Estimate, inspection reports and home appraisal documents. In addition, you usually need to bring the contract, proof of title search, and title insurance.
Receiving the Closing Disclosure
The mortgage lender will typically send out a Closing Disclosure listing the terms of the mortgage loan, closing costs and loan payments. You should receive this document about three days before the closing.
In the past, your real estate agent would receive the Closing Disclosure so that they could compare it to the Loan Estimate document and check for errors. In recent years, due to privacy concerns, the closing disclosure is often sent directly to the home buyer. However, you can provide a copy to your real estate agent so they can review the figures and help fix any discrepancies.
If the information is correct, bring the Closing Disclosure to the meeting.
Final Walk-Through Inspection
At the 24-hour mark, you will likely be allowed to perform a final walk-through of the house to inspect it. Take note of any changes the seller made and had been agreed upon, which should be listed in the contingencies noted by your real estate agent when relaying your purchase offer to the seller.
You should also look for items that should be in the house and for any damages. If there are problems, the closing may be delayed until the issues are addressed.
You will have a mountain of paperwork to sign at the closing that will allow the transfer of property ownership over to you. You generally also have to sign the mortgage documents for the loan.
Carefully read and ask questions about any part of the paperwork that you don't understand so you clarify your obligations and what will happen once the transaction is completed. This will most likely be your last chance to protest any conditions or fees that you do not agree with in the documents.
It is now officially time to pay all the required fees, closing costs, and down payments. While you may opt to have these payments rolled into the loan, there may be out-of-pocket costs to be dealt with before you are handed the keys to the house. Be aware that the final amount you owe at closing is sometimes greater than earlier estimates, and you will need to cover the difference.
The House is Now Yours
Once the final transactions are completed and the documents are signed, the house is yours. You should have all the documents -- including the mortgage note, deed of trust and certificate of occupancy -- in your possession. It is now time to pack up your bags and head out to live in your wonderful new home.