Mortgage Financing - Closing Day Information

Closing Day

Even though you may have closed many home loans before, you still may be a little fuzzy as to what happens on closing day. If this is your first time then hold tight because we are about to line it all out for you. Keep in mind that these are all generalities and customs do vary from location to location.

First you will present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable).

The seller will then provide proofs of any inspection, warranties, etc. Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. You will most likely sign many documents on closing day. Many of them are just the standard stuff but others you will need to pay close attention to. To be safe, just pretend like all of them are the important ones that you need to pay attention to.

The seller will give you the title to the house in the form of a signed deed. You'll pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner. Sometime later you will receive your mortgage deed in the mail. You can then relax until it is time to SELL your home.