Did you think we’d ever get here? Think back at all of the houses we looked through, then the offer and negotiation, inspections and appraisal. You’re nearly there and 2 steps closer to being a real, live, homeowner!!
But first, It’s time to pay the down payment and the closing costs.
Remember this article? Due to changes to our Federal Lending laws, your mortgage lender will email you an estimate of your down payment and closing costs (remember closing costs are usually 2 – 3% of the purchase price of the property) at least 3 days before closing.
In addition, your mortgage lender may ask you to transfer over a little extra money (usually around $1500 – $2000) just in case the closing cost figures are off at all. For example if you’re buying a $1 million dollar property and you’re putting 20% down, your mortgage lender will ask you to wire transfer approximately $232,000 ($200K for the down payment, $30K for the closing costs and an extra $2K).
- Remember, your mortgage lender or the title company will email you the wire transfer instructions which gives you the account number to send the wire transfer. VERIFY you have authentic instructions!!
- Remember to find out what time your bank stops accepting same day wire transfers. Often times wire transfer times aren’t the same as their operating hours. Your wire must be complete before their cut off time or it will not occur that day but the next business day. Plan to take a long lunch break from work as you have to go into your bank in order to conduct a wire transfer.I can’t stress enough how important it is that you are careful about wire transfer instructions and timelines. If you don’t transfer the funds on time, closing will be delayed because the title company will not accept a cash or check. This puts all parties in a major bind. Emotions run very high when this happens.
- Once you’ve sent over the wire transfer, email me and your mortgage lender so we can check to make sure the Title company received the funds.
IMPORTANT: DO NOT follow wire transfer instructions unless they were sent to you by the escrow closer from the Title company All wire transfer and financial instructions will come via password protected or by encrypted email from the escrow close. There are a lot of scammers out there who have been hacking into Realtor and attorney emails lately and sending buyers fraudulent wire transfer instructions in an attempt to divert your hard earned money into their accounts. Before you transfer your funds, call the escrow closer directly to confirm the wire-transfer instructions. DO NOT rely on the phone number in the email as this number could be fraudulent as well if the email is fraudulent. Look up the phone number for the escrow closer through Google or by asking me and call that number instead. I cannot stress enough how careful you need to be when sending over your wire transfer to make sure it isn’t being directed to a fraudulent account.
Just a reminder, at closing you’ll get a refund check back made out to you for any overage closing cost funds you transferred.
It’s Closing Time
Closing location is generally determined by the title company. And parties make every effort to close at a location close to the property being purchased. A closing confirmation email showing the date, time and location will be sent out prior to closing. Closing will not be set until the Buyer’s lender issues a clear to close (CTC) loan approval.
Once closing is scheduled, I recommend calling to confirm your movers one last time. Make sure they have the proper sized crew and truck to efficiently complete the move. If you are moving out of a condo or apartment and are not on the first floor, let them know, especially if your building doesn’t have an elevator.
Most closings take approximately 2 hours but can take longer- be prepared for this. While moving on the same day of closing is not recommended, if you are moving on the day of closing please be sure to give yourself enough time to complete the closing before you need to meet your movers. You cannot leave the closing table and come back to finish up.
A few important reminders for closing:
- Bring your drivers license photo ID with you
- Bring your checkbook (just in case) often used to verify account number.
- Bring copies of your earnest money receipts and wire transfer receipt for the deposit and closing costs
Closing takes approximately 2 hours, however, it can be as short as 1.5 hours or up to 4.5 hours if there are problems. On average, expect to be finished in 2 – 2.5 hours.
At closing, in addition to you, there will usually be the following people present:
- The title officer. The title officer makes sure everything is signed properly, sends all of the signed documents to the underwriter for one last review and issues any refund checks at the end of closing.
- You and me.
- Sometimes the seller’s agent depending on when they have scheduled to finish their paperwork.
The sellers are usually not present at our side of closing as they have pre-signed all of the documents. Before you go to closing, call the title company to verify the address. Don’t be surprised if closing starts late.
A note about spouses who are not on the mortgage loan:
Even if your spouse is not on the loan, most of the time your spouse must sign the mortgage documents discussing marital interest, debt assumption or interest to waive homestead rights. It is important to talk to your lender if you are recently divorced (divorce finalized during negotiations to purchase) or getting divorced imminently. You may need to bring additional documentation, such as a divorce decree. Even if your spouse is not on the deed, for a home, your spouse must sign the deed to release his/her interest.
During closing, make sure you understand how and when your property taxes get paid and how to get tax exemptions. Your lender and your title company can discuss this with you, but don’t forget to talk to your accountant to make sure you are taking advantage of tax benefits if you qualify to receive any.
At the very end of the closing, the Title officer will give you an overage check which is essentially a refund of the additional money you transferred over when you sent your down payment and closing cost fees. Remember to wait at least 48 hours to deposit this check.
You’ll receive a copy of your HUD/Settlement statement. Hold on to this! You’ll use it when you prepare your taxes.
For now, Click here for an explanation of what the HUD is as well as tips for understanding it After August 2015, there will be changes to this process.
The keys are yours and you can officially move in!
Questions? call me @615-977-8444 or email whereyoulivetn@gmail.com