You've gone through Mortgage Pre-Approval ... the Mortgage Application itself ... the verifying of employment(s) and savings accounts ... the documentation needed ... and Underwriting. You've complied to every request presented to you. Answered every question. Dotted every "i" ... crossed every "t".
Gulp! Now what?
The Mortgage Closing. The culmination of all your hard work and what you have been planning for over the previous months!
Just how do you determine when your Closing should take place though? Well, first ... a date has been set and agreed to within your Real Estate Sales Contract. If your mortgage processing went reasonably smooth, you will be closing on or close to that date.
But there are other important considerations as well. Ever hear the old saying, "timing is everything?" Well, in Closings that can be very true. So WHEN you close ... the day chosen can determine much. The amount of money you must bring to the Closing table (known as pre-paid interest) is certainly determined by which day of the month you Close.
HOW? A date set later in the month translates to lower closing amounts due at Closing, as prepaid mortgage interest costs accrue from the date of Closing up to the beginning of the next month. This fact explains the high number of Closings you find set at the end of each month. And just why it's sometimes harder to set a Closing appointment last minute during that time.
But most likely your Mortgage Lender will try to avoid setting a Closing date too late in the month also. Should problems arise, they might cause a postponement or delay and that increases the chance of being re-scheduled at the beginning of the next month. As pointed out above, that can be costly. If possible, a date that affords you some flexibility will be chosen for your benefit.
So what happens during your actual Mortgage Closing?
That can depend on where you are buying. Each state (or local municipality) determines its own method and requirements for closing a loan.
For those in Illinois/the Chicagoland region, Closing typically means the following:
What the Borrower(s) Need to Bring:
* Funds to Close: Either a Cashier's Check (typically payable to the Title Company) - or - a Wired (Electronic Transfer) from the Borrower's bank to the Title Company's bank. Please note: Amounts $50,000 and over due at Closing must be wired in (State Law).
* Photo ID's (typically active Driver'sLicense or State-issued ID. Acceptable: Passport)
* Proof of Homeowner's Insurance coverage (Declaration page), along with proof of the 1st year's payment, has typically been provided prior to your Closing/Closing date being set, when closing through American Portfolio Mortgage Corp./my services. But in other instances, this is an important requirement for Closing day. So make sure you have this information and document with you at this time.
WHO attends: (Note: In our Chicagoland area, many of the Closings take place at title companies. But Closings are possible, through my services, in other locations, including your home or place of employment.)
* All Borrowers on the loan (and sometimes the spouse not on the loan)
* Attorney(s) for Buyer and Seller
* Realtors for Buyer and Seller
* The Loan Officer (part of my personal mortgage services)
* Title company Closing Agent
* Seller(s), if still living in the property
What documentation will be signed:
* The title company prints and prepares the Lender's Closing Package and Settlement Statement in a concise packet, typically reviewed by the Borrower(s)' Attorney, and signed by the Borrower(s) after each form is explained.
The four most important documents are:
* The Settlement Statement (HUD1)
* The Truth-in-Lending Disclosure (TILA)
* The Note
* The Mortgage
and various others ...
How much time will the Closing take?
Mortgage Closings take longer than they did in the past. Depending on the efficiency of the Closing Agent, title company, attorney(s), real estate professionals, Mortgage Lender involved, and the Borrowers themselves ... participants should be prepared to set aside a minimum of 1 to two hours for the signing of documents and Closing procedure.
After all documents have been signed, the Borrowers receive the keys to their new home. (Agents (and I) strongly suggest for safety reasons that upon moving, new owners change all the locks to their home.)
Although you have now successfully completed the actual Closing portion on your new home transaction and mortgage financing, there is still one very important facet of your financing to be explained. How to make your mortgage payments.
Your Mortgage Lender will explain when your first payment is due (and subsequent payments) and how to make your first payment. Within the paperwork you receive at your Closing, you receive a coupon providing you information and an address as to when and where your first mortgage payment should be sent.
Should your loan be sold at any time in the future, you will then be provided with the name, address, and terms of payment with the new loan servicer. Be aware that the new loan servicer must honor all the terms and conditions of the original mortgage agreement you signed at your Closing.
Your Mortgage Closing: What You Can Expect. The above info covers the typical Closing that takes place in the Chicagoland and Will County (IL) area. Please remember, that all real estate ... including its business and transfer ... remains local. The Closings and procedures conducted in your area may vary from what is foundhere. Please ask your real estate professionals to clarify what differences may take place within your specific locale.
* Dreaming of buying a home or refinancing within the New Lenox, Will County, Chicagoland region? Contact me! I will put my 36 years of mortgage experience and expertise hard to work on your behalf.
I can be conveniently found at any of the following: