It's Closing Time!
Break out the pens and the bubbly.
You're almost there. You and the seller have agreed on terms. The title company has gotten the paperwork and the check from your lender. All you have to do is sign a bunch of papers, hand over the down payment and pay the fees.
- Set up closing. The formal closing, or the meeting where the final papers are signed and the house officially becomes yours, is coordinated by the title company and generally takes place at the company's office. A title company (or title insurance company) checks the property's title history and looks for liens or any other obstacles to sale. Once the title is deemed legally "free and clear," the company offers insurance as reassurance of a clear transfer of the home. Your mortgage loan officer will probably suggest a title company to use; if not, your accountant or real estate attorney can help. Because your escrow account will probably include your annual homeowners insurance premium, your insurance provider and the closing agent (the agent at the title company you're using for closing) will need to be in contact before the closing date.
- Close that deal. Closing makes many first-time buyers nervous because it seems like a forbidding procedure where you sign your life away on a bunch of papers you don't have time to read. Actually, by the time closing rolls around, the hard part is truly over with. Closing actually feels a little bit giddy — at the end, you have the keys to your new house! Your loan officer will be there, as will the seller and the closing agent. You will sign your name 487 times, but if you've done everything right up to this point, it will not be stressful. Relax.
Three things to remember:
a. You'll get the final settlement statement that details all closing costs and terms of the loan just a day or two before closing. Review it carefully to make sure it jibes with the good faith estimate you received earlier. The GFE is not final; the settlement statement is. If anything is weird, call your loan officer immediately.
b. You must get a cashier's check made out for whatever final amount you owe at closing, including the down payment. This amount is generally at the bottom of the settlement statement and takes into account any earnest money or upfront closing costs you paid beforehand. You can't write a personal check for this amount! So don't forget.
c. Bring your driver's license.
If you're keeping your down payment in an account that isn't immediately liquid (like a high-interest online savings account, because you're so smart!), don't forget to move the funds to your checking account several days ahead of closing. Actually, go put that on your calendar right now; you can thank us later.
Finally, celebrate! If you have two nickels left to rub together after the last paper is signed, we suggest spending them on a bottle of champagne. You deserve it.