As I stated in the closing of my last blog on in this series Meeting Conditions On The Commitment Letter once the Attorney and the Buyers have completed all of the conditions that were listed on the Commitment Letter, the Closing Department will give the Attorney a "Clear To Close". These are the words that everyone has been waiting to hear during this whole process. The words that were needed for The Big Day to happen, The Closing. Now a firm Closing Date that has been agreed to by all parties can finally be set.
Many times The Closing date is different from the date that was initially written in the Sales Contract. There could be various reasons for this. The Buyer or Seller might wish to close earlier, or the Seller isn't ready to move yet, another reason would be if the Buyer had trouble meeting the conditions on the Commitment Letter and needed more time. If issues arise between the time the loan is approved and The Closing, I make sure that I stay in touch with the Borrower, Closing Department, and Attorney, until the issues are resolved. Keeping everything moving, and making sure everyone is doing what they need to be doing is essential if The Closing is going to happen within the date that was set in the Sales Contract.
On the day of The Closing everything is set, the Buyer has met all the conditions, the Attorney has prepared all of the necessary documents, and the Sellers have moved out of the house. I try to be at my Closings, but as I have taken on more management responsibilities that has become more difficult. However, I make sure that my Borrower knows that I will be available by phone and e-mail should they need me to answer any question that might come up during The Closing. On the day of The Closing, but prior to The Closing a couple of things need to done:
- Wire The Money - The Closing Department will wire the necessary funds to the Attorney's Escrow Account, so the the Attorney can cut all of the checks that will be needed at The Closing.
- Walk-Through - Sometimes this is done on the day before The Closing but most of the time it is done on the same day before the Buyers come to The Closing. The "Walk-Through" involves the Buyers and their Realtor taking a physical walk through the property and inspecting it to make sure that everything is as they expected it to be. If it is great, if it isn't then those things will be discussed at The Closing and an agreement on how to remedy the situation will have to be reached before the transaction can be finalized.
Signing Documents - Generally the Buyers and their Realtor head to the Attorney's office for The Closing after they have done the Walk-Through. Once they have arrived the signing begins, usually the Buyers are very nervous, but very excited as well. This is most likely the most money that they have ever committed themselves to, and there is usually a very nervous excitement in the air. All documents are explained by the Attorney, and on occasion by me, especially if it is a Connecticut Housing Finance Authority (CHFA) Mortgage. As I stated before I try to attend my Closings, because it does seem to put the Borrowers more at ease. Some of the more important documents that the Buyers will sign are:
- Settlement Statement (HUD-1) - The HUD-1 is basically a financial statement which contains all the costs and credits that both Buyer and Seller will incur or receive on the day of the Closing. For me this is the most important document that both Buyer and Seller will sign on the day of the Closing. I tell my Borrowers that it is very important that they look at every figure carefully and make sure that it is what they expected, if it isn't, they need to ask question until they are satisfied with the answers. Here in Connecticut the Buyer and Seller will sign 6 - 7 original copies of the HUD-1 depending on the Attorney.
- Truth-In-Lending - They will also sign a new Truth-In-Lending, that has been adjusted to reflect the actual costs which were not known at the time they signed the original one with the Application.
- The Mortgage - This document is the legal device that is used to secure the property. It pledges the title to the property as security for the Loan. This document is several pages long, and will stipulate what the obligations of the Buyers are, and what will happen if they default on the Loan.
- The Note - Is the written promise to repay the amount borrowed to the holder of the Note along with interest. It will state the amount of the debt and the interest rate. Once the Buyer signs this document they are personally responsible to repay the amount stated on the Note. The Note contains a lot of the same terms and conditions that were also stated in "The Mortgage". They are so similar that many times Buyers think that they are signing the same thing, but it is different and carries different obligations.
Here in Connecticut the Sellers also attend the same Closing as the Buyers. So as the Buyers are just about completing the signing of the above documents and others, the Sellers, their Attorney, and usually their Realtor arrive. The Sellers will sign the HUD-1's along with other documents that pertain to them. Once everything has been signed by the Buyers and Sellers their only remains three things to happen. Besides making a phone call to my Borrowers to let them know that their loan has been approved, this is my favorite part of the process. No matter how stressful it was during this process, it does not matter at this point. Everyone has great big smiles on their face, and looking forward to the new chapter in their lives, a chapter that I plan to be a part of with my Borrowers. As I said only three things remain to be done at this point.
- Checks- The Attorney distributes the check to the Sellers, and the two Realtors if they are present.
- Keys - The Buyers receive the much awaited "Keys", and are now the proud owners of the house of their dreams.
- Recording The Deed - Even though everything has been signed and keys have been given to the Buyers, one more thing still remains to be done. The Attorney now needs to formally record the new Deed onto the Land Records, at the Town Clerks Office.
The Closing might be over, but it is not the end of my involvement with my Borrowers, in fact in many ways it is the start of a new beginning. A beginning of being their for them as long as they have this mortgage, and keeping them informed of options that may come along during that time. I will cover my involvement with my Borrowers during the Post Closing years in my next and final blog in this series
Other Blogs In This Series:
Who To Call For Your Mortgage Needs In Connecticut:
George Souto NMLS# 65149 is a Loan Officer 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, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 email@example.com, or visit my McCue Mortgage Homepage.