Once you’ve found the home of your dreams and have gotten approval for a home loan, the closing process could confuse and overwhelm you if you have never gone through the closing process before. While you could trust your lawyer or title company to navigate the crucial regulatory details, you will feel more confident in your purchase if you truly understand what’s going to happen.
The Closing Process Demystified
Closing or settlement is the conclusion of the last step in purchasing and financing your home. It is when you and all relevant parties sign all the required documents to “close the sale.” Following the signing of documents, you will be responsible for paying off your home loan.
The property purchase and the mortgage closing, which is the time when your loan is finalized and your funds allocated, usually occur at the same time. Common entities involved in closing include:
- Your Lender
- Your lawyer – if you hired one to help you out during closing or if your state requires legal representation during closings
- The seller’s lawyer
- Escrow company
- Title insurance company
Depending on the closing requirements or guidelines in your state, all relevant entities might meet in a predetermined location and sign all necessary paperwork on the same day, or the closing process might take a couple of weeks for all the signatures of all relevant entities to be collected, says an expert from Wasatch Peaks Credit Union. Likewise, depending on the entities involved, closing could also include signing documents electronically, over the Internet, even through the mail.
Other Critical Things to Know
Prior to signing on the dotted line, make absolutely certain that you have carefully read and truly understand everything that you need to sign. Primarily, don’t sign if you don’t agree to the terms, if you spot errors, of if you don’t understand the documents. Once you have finished reviewing and signing all relevant paperwork, you’ll be given the keys to your new home and you’ve successfully completed the closing process.