Home Closing 101

For first time home-buyers, the "closing" is sometimes an overwhelming flurry of lawyers, Realtors and paperwork. Many homebuyers really do not understand all of the details, and the complex issues can be confusing at best and can have major long-term ramifications.

Here are some details for first time homeowners about your closing:

WHAT HAPPENS AFTER I'VE APPLIED FOR MY LOAN?
It will take a mortgage lender 1-6 weeks to complete the evaluation of your application--and more and more often, they are asking for additional information. The faster you can provide that information, the faster your application will be processed. After the lender is satified with what you've provided, your information will be verified and the lender will make a decision on if you will be given a loan. They will let you know if you are an approved and if that is the case, a closing date will be set. After closing, you'll be able to move into your new home.

WHAT SHOULD I LOOK OUT FOR DURING THE FINAL WALK-THROUGH?
The walk-through is the last chance for you to walk through the house after it has been emptied. You will get a clear view of the walls and ceilings, and the opportunity to see any work the seller agreed to do in response to the inspection. If you notice any problems, you should bring them up prior to closing. It is the seller's responsibility to fix them.

WHAT MAKES UP CLOSING COST?
Closing costs are usually made up of the following:

-->Attorney's or escrow fees (Yours and your lender's if applicable)
-->Property taxes (to cover tax period to date)
-->Interest (paid from date of closing to 30 days before first monthly payment)
-->Loan Origination fee (covers lenders administrative cost)
-->Recording fees
-->Survey fee
-->First premium of mortgage Insurance (if applicable)
-->Title Insurance (yours and lender's)
-->Loan discount points
-->First payment to escrow account for future real estate taxes and insurance
-->Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)
-->Any documentation preparation fees

WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?
On your closing day, you will present your paid homeowner's insurance policy (or a binder) and receipt showing that the premium has been paid. The closing agent will then present a list of the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspections, required repairs and warranties.

You will be presented with all of the documentation and it will be explained to you. Once you're sure you understand each piece, you will sign the mortgage, agree that if you don't make payments the lender is entitled to sell your property (and apply the sale price against the amount you owe plus expenses). You will also sign a mortgage note, promising to repay the loan. The seller (or his agent) will give you the title to the house in the form of a signed deed.

You will pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds.

Now you are a homeowner!

WHAT DO I GET AT CLOSING?
At the closing, you will get a:

-->Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)
-->Truth-in-Lending Statement
-->Mortgage Note
-->Mortgage or Deed of Trust
-->Binding Sales Contract (prepared by the seller; your lawyer should review it)
-->Keys to your new home

If you would like more information about the Mint Hill, Matthews and Charlotte area real estate market? Call me: Rich Ferretti, When YOU are ready! 704-564-0807
Check out www.minthillrealty.com