What You Should Expect During the Closing Process
10-05-2020 • MHS Lending
Closing on a home is the final chapter when settling your loan but the closing process can sometimes feel overwhelming. After you’ve had an offer accepted, gone through the full approval process and all inspections and are ready to go, your lender will clear you for closing. Your closing date will be set far in advance but might vary slightly during the process.
The closing process is pretty straight-forward and when you finish signing documents, you’ll receive the keys to your dream home. Closing happens during both a new property purchase and refinance and for the most part the process is the same. We’re here to help you understand the closing process including what to expect and prepare so you’re set for success.
When does the closing process happen?
There are many steps to purchasing and refinancing a home and closing is the final one. The date is set far in advance in order to give everyone enough time to go through all necessary steps. Closing typically happens 4-6 weeks after you initially start the loan process.
If you’re purchasing a home, closing is the final day in the process where everyone meets to sign documents and make the transaction official. It’s important to note that sometimes closing is also referred to as “settlement”. If you’re refinancing a home, there are less people involved in the closing process, but it is still your final step in completing the loan.
Who attends the closing?
For a new property purchase, there are typically more people at closing than for a refinance. The exact individuals who are required to be at closing varies based on where you live but there are a few you can usually expect to see. Attendees include the seller and their realtor, you (the buyer) and your realtor, a representative from a title company, and occasionally a representative from your lender. Other people who might also be in attendance are a lawyer and notary. Sometimes if the seller pre-signs the deed and transfers all the documents they may not need to attend.
For a refinance, there are less people required at closing because you are essentially the buyer and the seller. In attendance will be you, a closing agent, and possibly a notary. Sometimes closing happens at the office of your realtor or title company, and sometimes it happens at your home. Due to COVID-19 some of the rules and regulations regarding who attends closing and where it’s held may have shifted. Check with your lender or bank as closing approaches to determine all the important details of closing.
What you should bring to closing
Since closing is the final step in the process, most of the paperwork and required documents will already be submitted. When you attend closing there may be a few things to bring that your lender will inform you of ahead of time. Some of these items may include your driver’s license or ID, any paperwork you signed throughout the process, and your checkbook for any small fees. One important thing to note is that if you have a recent name change, you’ll want to ensure the ID you bring matches the name on your title and mortgage.
Documents you might sign at closing
Wet signatures are important to the loan process and you can expect to sign a lot of documents at closing. While there are many different papers to sign, Bank of America has pointed out the three most important ones. A deed of trust or mortgage, the promissory note and a closing disclosure. The deed of trust or mortgage puts a lien on your property as collateral for the loan. Your promissory note is a legal agreement to pay the lender. This document will include key information like when you will make payments and how to make those payments. A closing disclosure is a list of your final credits and charges including closing costs and final purchase price.
Other key documents might include the initial escrow statement, a right to cancel (refinances only), and a deed (purchases only). The closing agent will explain every document to you before you sign so you know its purpose. Because there are so many documents, closing may take up to a few hours, but the process is fairly straight-forward.
Congratulations on finishing your loan process!
Once you finish signing all the documents during closing your work is done. Your closing agent process will provide you with a full packet of copies for your reference and you’re good to go. If you’re purchasing a new property you may even be able to move in as soon as the appointment is over. Keep an eye out on the mail for information on how to make your first payment on this new loan. If there are any overages in payment or escrow due to a refinance you may even receive money back.
By Veterans for Veterans, at MHS Lending our team specializes in VA loans. We’ll walk you through the VA loan process while you relax, and we work tirelessly on your behalf to make you a homeowner. We believe in transparency and preparation and that’s why we created our free online VA Home Loan Seminar. This seminar provides with you everything you need to know from start to finish to make your experience as seamless as possible. Reach out to our team once you’re ready to get started on your home buying or refinance journey, and we’ll be in touch to get you started!