What happens at closing? - Closing is probably the most exciting part of the loan process! It is when you take ownership of your new home, or you get your cash out (after 3 day recission period) from refinancing, or possibly when you start saving money from a rate and term refinance. There are some things that you should expect to happen at your closing.First, a public notary is ordered to be present at the closing. The job of the notary is to document the legal presence of all borrowers and certify that it was indeed the named borrowers signature placed in the appropriate areas of the loan documentation in witness of the notary.
Where you live will determine what type of closing will take place. There is whats called a round table closing where the buyers and sellers sit down together along with a representative from the title agency and usually the Realtors involved also. Then there is also a type of closing known as an escrow closing. This is when the closings for the buyer and for the seller do not happen together or face to face. This type of closing may be done at different locations or at different time of the day. Usually your geographic area that you are located in will dictate which type of closing you will have.
Some states are "Lawyer" States. This is when the closing is done by a Real Estate Lawyer rather than a public notary.
All parties attending the settlement are identified. Closing attorneys will request photo identifications from all signers. To ensure a smooth settlement process, be sure to bring several forms of valid photo ID's.
If you are purchasing a home the closing is ended with your keys being handed to you as the owner of a new home. If you are refnancing and pulling cash out you will have to wait 3 days to receive your money.
At the closing you will be given all documents related to the closing of your loan, and documents relating to transfer of ownership if a purchase.
For a purchase transaction, if the buyer signs the documents before the seller, he can't get the house key until the seller comes in to sign the documents. Then the lender will review all the documents signed by both parties. If everything is approved, then the lender will wire the money to the title company, and then the title company confirms if the lender has funded enough money. After everything is verified, the title company will hand over the key to the buyer.
Closing - Also known as settlement, this is the time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs, and receives title from the seller.
If you are closing on a refinance, your loan will not fund at closing. You will have a 3 day right to rescind period and your loan will fund on the 4th business day.
Make sure you bring your id to closing as they will verify, also if you are required to bring money to closing, have it in the form of certified funds.
It overseen by by either an attorney or notary public and they will notorize the necessary documents and make sure the closing package gets back to lender promptly.
Closing is short for the closing of escrow. A real estate transaction and/or finance transaction is not complete until all parties to the transaction have completed their duties. A title company or attorney usually oversees a transaction to make sure everyone performs their duties according to law and signed contracts. The final steps in a transaction usually take place at what is called a closing. This can take place in a Title office, Attorney's office or a mutually agreed upon place.
The closing of your loan can usually take place anywhere. Wile many closings take place at the title office of the title company or at the attorney's office many closings take place at the comfort of the borrower's own home. The title company will send a representative, whom is a legal notary, to the borrower's house to go over the final documents, have them signed and notarize them. Many title companies will go out to a clients home when it is convenient for the borrower and close loans after business hours and even sometimes on weekends.
Be sure to allot ample time for settlement, as it can take up to 3 or 4 hours. All parties whose signatures are required on closing documents need to be present, unless a power of attorney is executed prior to the settlement.
Even if a spouse is not obligated to the loan they are sometimes required to be at closing and sign certain documents such as the 3 day right of rescission.
The final piece of the process in purchasing and/or refinancing property. The closing will include the transfer of deed, obtaining signatures on the notes and the distribution of funds. This procedure is commonly called the settlement.
Your broker should always be available durring the closing of your loan. The closing is when the rubber meets the road. Often times a reliable broker can be very beneficial to a closing.
At closing or usually before you will have a HUD1 which is the settlement statement. The HUD1 is drawn up by the closer in the title company or closing attorney's office based on closing instructions by the lender. This allows you and your mortgage professional to review to make sure all of the fees are correct.
Quick Closing - How can you help speed up the mortgage process? There are many ways to assist with this. Here are a few: Be prepared with all necessary documents that you may need and keep them all in one place for easy access (tax returns, W2 forms, pay-stubs, Bankruptcy papers {if applicable}, asset statements, purchase agreements, etc...). Next, please respond promtly to requests for additional information to insure a quick closing. Lastly, make sure you respond to the appraiser and let them into your home as soon as possible. The appraisal is many times the lengthiest part of the whole process and the sooner he/she can get into your home and appraise it the quicker we can get your loan into closing.
It really comes down to getting the request documents to the loan officer as soon as possible.
Many brokers have automated underwriting available to them which speads up the loan process. Typically a hold up in a loan is because documentation requested from the borrower is not given to the broker in a timely manner or is sent incomplete.
Even though just about every borrower desires a quick closing it is prudent to be suspicous of a lender that wants to close too quickly. It is a common ploy of some Subprime direct retail lenders and Finance company lenders to have a borrower sign closing papers just a few days after the borrower's initial contact. These lenders will purport that this is being done in the name of good service when in fact it is often because their rates and fees are quite excessive. They want to get you signed and closed before you realize this. A legitimate loan process does take some time. If you feel things are moving too fast for your comfort level, take control and make sure you are doing the right thing.
To get your mortgage loan to the closing table quickly you need to make sure you have completed your loan application completely and honestly. By embelishing you employment history or your income figures or your current residence you will simply lengthen the process and possibly even cause denial of your loan. The more up front and honest you are from day one, the better and quicker your mortgage professional will be able to suit you with the right loan for your situation and get you to the closing table. Also, be prepared to explain any derogatory credit or recent credit inquiries. If you experienced a few missed payments due to a divorce, illness, or for any other reason have an explanation ready. The better prepared you are, the more complete your loan application package will be for the underwriter and there will be no blanks left for them to fill in. Following these items will enable you to close very quickly.
Thorough preparation ensures quick closing. Before loan application, or even before your home is found, acquire a copy of your credit report and see if there are adverse items reported. Consult an experienced mortgage professional about your loan options. Cooperate with your loan officer with regards to any additional documents needed to clear loan conditions.
Just like the Boy Scout Oath, "Be Prepared" Always make sure your documentation is readily available even if some items have not been requested yet. Keep bank statements filed and easily accessible along with all tax documentation. Underwriters are human too. Sometimes documents can be misplaced and having the original will definitely speed things up.
Ask your mortgage broker to prepare a list of documents you need to obtain, and go through this list and check off each item as it is gathered. Ensure all pages of bank statements are obtained, nice clean copies of all paystubs, statements etc. Give as much info as you possibly can about your situation. Eventually most things will be found during the process, and it's always easier to get through a problem if we know to expect it up front!
Ask to view the documents by yourself 24 hours from closing. This will allow you to ask your lender any questions you may find BEFORE you go to signing and will speed up the signing process as well.
