1st Time Homebuyer Seminars ..... Preparing For The Closing. So far we have covered in this 1st Time Homebuyer Seminars, the The Opening Questions, Pre-Qualification Process, process of Choosing A Realtor, Shopping For A House, Applying For A Mortgage, and Processing & Underwriting The Loan. The next topic of the 1st Time Homebuyer Seminars is Preparing For The Closing.
Now that the Commitment Letter has be issued, which means the Mortgage has been approved, and the Bank/Lender has committed the funds, everyone is much more at ease. But this is not a time to relax, all the conditions on the Commitment Letter have to be completed before the Closing can occur. From this point on the Closing Department will be in charge of staying in contact with the Borrower(s) and the Closing Attorney to make sure all conditions and instructions are met.
At this time a tentative date can be scheduled for the Closing. But the "Clear To Close" cannot be set, and a Closing will not take place until:
- ALL of the conditions and instructions have been satisfied
- A Closing Disclosure has been sent & received by the Borrower
- A 3 Day mandatory waiting period required by the Consumer Financial Protection Bureau (CFPB) after the Borrower acknowledges receipt of the Closing Disclosure.
It is very important the conditions and instructions on the Commitment Letter are completed as soon as possible, so there are no last minute surprises. This means the Attorney and Borrower(s) need to start working on those conditions right away.
- The Attorney - Connecticut is an Attorney State, which means the Attorney will prepare all of the final documents needed for the Closing as well as conduct the Closing. The Attorney will immediately begin to work on:
- The Title Search - This needs to be done in order to make sure there are no Liens against the property, and the boundary lines of the property are verified.
- Title Policy - A Basic Title Policy is required by all Banks/Lenders in Connecticut. The Basic Title Policy will among other things protect the Buyer against liens on the property. Most of the Attorneys will also suggest the Buyer pay for an Owners Extended Title Policy which will further protect them against boundary line disputes.
-
Closing Documents - The Attorney will also prepare all of the other documents needed for the Closing such as the:
- Mortgage
- Deed
- Initial Closing Figures For the Closing Disclosure - This is the document which contains all of the final Closing figures and how much money the Borrower(s) will need to bring to the Closing.
-
The Borrower - Needs to complete all of the conditions on the Commitment Letter which pertained to them as quickly as possible (have I impressed enough that all this needs to be done right away?) Some of the common Borrower(s) conditions on Commitment Letters are
- Homeowner Insurance - If the Borrower has not already shopped around for Homeowner Insurance, they need to do so now, and have the Insurance Company provide an Insurance Binder to the Closing Department. The Insurance Company will also require the Buyer to pay the first year's premium sense there isn't any money in the Buyer's Escrow Account to pay for it. The following year the Homeowners Insurance will be paid out of the Escrow Account, because the Buyer will have been paying one month of the insurance premium every month with their monthly payment.
- Paystubs - If additional paystubs were need they need to be given to the Bank/Lender at this time. One common reason why more paystubs would be needed is if the Borrower just started a new job during or just before applying for the Loan. If this is the case the Borrower(s) might not have had a full month of paystubs at time of application or Loan Commitment. They will need to produce a full month of paystubs (30 days) before they can Close on the house. This situation is also common of Borrower(s) who are moving from out of state.
-
Gift Funds - Most of the time if the Borrower(s) are receiving Gift Funds, the Donner may not have provided the funds until they are sure the loan was approved. So now that the loan has been approved, the Borrower will need to show documentation they have received the funds. The documentation generally needed are:
- Gift Letter Form
- Copy of the Gift Check
- Bank Statement or Bank Printout covering 30 days from the donor showing the funds being withdrawn from their account.
- Bank Statement or Bank Printout from the Buyer showing the money being deposited.
- Repairs - If repairs were noted on the appraisal and were not completed before the loan was approved, they will ALL have to be completed, and the Appraiser sent back to the property to verify they were done before a Clear to Close can be given.
Once the Attorney and Buyer have completed all of the conditions listed on the Commitment Letter, the Closing Department will:
- Re-Pull the Borrowers Credit Report
- Re-Verify Employment
- Prepare and send the Closing Disclosure to the Borrower
- Schedule The Closing
- Give Clear To Close
"Clear To Close", these are the words everyone has been waiting to hear during this whole process, and now the Closing can take place on the date agreed by all parties.
The next and final blog in this 1st Time Homebuyer Seminar Series will be the "The Big Day", the day that everyone has been waiting for, "The Closing".
Previous Blogs In This Series:
- 1st Time Homebuyer Seminar Series
- 1st Time Homebuyer Seminar ...... Opening Questions
- 1st Time Homebuyer Seminars ..... Pre-Approval Process
- 1st Time Homebuyer Seminars ..... Choosing A Realtor
- 1st Time Homebuyer Seminars ..... Shopping For A House
- 1st Time Homebuyer Seminars ..... Applying For A Mortgage
- 1st Time Homebuyer seminars ...... Processing & Underwriting The Loan
******************************************************************************
Info about the author:
George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
Comments(7)