The last step in home buying: the closing

The last step in home buying: the closing

Although the closing of the sale of a home is the last step in the home buying process, there are some basic questions about it starting from the moment you choose which home you are going to purchase. Because it is a rather lengthy process, there are a variety of participants, deadlines, and documents which have to be managed before the closing takes place.
The top ten frequently asked questions about closing the sale of a home are as follows:

1 What Is a Closing?

The closing is the process whereby the mortgage and the sale of the property are finalized. This is a formal process usually held at the lender’s office. Some refer to this meeting as “closing the sale”. 

2 What Happens at a Closing?

All of the associated paperwork is reviewed, finalized, and accepted by all parties; the mortgage is issued; the seller is paid for the property; and the buyer takes possession of the property unless other stipulations are made for possession.

3 Who Are the Participants in a Closing?

There are usually several participants involved in a closing. On one side is the buyer and their real estate agent or attorney; on the other is the seller and their real estate agent or attorney; and in the middle is the mortgage lender or lender’s representative. The mortgage lender is the neutral party in the transaction and his or her primary position is to make sure the sale closes properly and legally. The mortgage lender cannot give advice or an opinion, and can only oversee and finalize the sale. Normally, the mortgage lender issues the mortgage check and is present at closing to ensure that all paperwork is in order.

4 What Paperwork Is Involved?

There is a host of paperwork involved in the closing, including the following: § Mortgage application§ Mortgage insurance (if any) § Mortgage contract§ Title insurance/certification § Property appraisal/surveys § Property insurance § Prior year’s tax statements § Current insurance policy§ Any/all inspections and their certifications The list of documents, and what is required of each party, is issued and reviewed by the lender who finalizes the sale.

5 When Does It Happen?

The closing takes place about six to eight weeks after the home purchase agreement has been accepted, but can take up to 10 to 12 weeks. During this time, all of the inspections are being done and certified; any repairs requested are being made; and preparation for the finalization is completed.

6 How Much Does It Cost?

For the buyer, the closing costs range between 2% and 3% of the total loan. An estimate of these costs will be given at the time of application acceptance. These costs may include the lender fees (origination fee, points, application, credit report, and appraisal), third party fees (closing fees, title exam, title insurance, and mortgage recording) and pre-paid items (interest, taxes, and insurance). For the seller, again the costs are negotiated, and could include points, taxes, inspections, and any repairs requested.

7 Who Pays What?

The fees and who pays them have been negotiated at the time of the acceptance of the home purchase agreement. Each party is given a list of their financial responsibilities by the lender.

8 When Are the Fees Paid?

The schedules of paying those costs are again negotiated at the time of the purchase agreement and overseen by the lender or their agent. At the time of closing both the seller and the buyer should be well aware of what is to be paid and should have the fees paid right then or have arrangements for payments in place.

9 How Long Does It Take?

The closing itself can take as little as thirty minutes or as long as three hours. The buyer should do a final walk-through of the property to ensure it is in the same condition on closing day as when it was shown. The amount of time closing takes also depends on how much preparatory work has been done, what still needs to be done, and if any of the parties are late for the meeting. The time is used to review the final paperwork, sign the mortgage and the title release, and transfer the property to the buyer and the money to the seller.

10 What Happens Next?

The closing attorney will register the sale with the Registry of Deeds for your town or city and you will get the keys to your new home.

For Additional Information, Visit these Web sites:

Coldwell Banker at: http://www.coldwellbankers.com
Prudential at: http://www.prudential.comReal Estate Lawyers at: http://www.lawyers.com