Mortgage 101: What Happens During Closing?

Mortgage contract

Closing day, also known as settlement, is immensely exciting for homebuyers because once you have concluded the closing process; you would no longer be a homebuyer, but a legal homeowner. Closing day involves meeting with the seller, your agent, the seller’s agent, and the escrow agent to review all the mortgage paperwork. Once everyone has had a chance to review the paperwork, the transfer of property would begin.

Do note that process would differ from one state to another, such that some states might not require the presence of everyone involved in the purchase.

The Review of Mortgage Documents

The step is immensely crucial because you would need to sign all the mortgage documents once you have read them. One of these documents is the Deed of Trust, also called Mortgage Note, which declares that you fully understand your debt and responsibility to repay it. This likewise indicates that your lender has the right to foreclose on your home if you default on your mortgage.

Another vital document is the closing disclosure. This document serves as your lender’s final statement concerning changes (if any) to the proposed loan structure, terms, and conditions, including your mortgage rate, explains a loan officer in Salt Lake City. Only sign the closing disclosure if the numbers you see is, give or take, the numbers your lender presented in your loan estimate. You would likewise have to sign a couple of affidavits and declarations stating that you understand all your rights and responsibilities as a homeowner. Once all documents have been signed and filed, all that’s left is for you to do is get the keys to your house, and perhaps make a toast for a successful home purchase.

Main Takeaway

To ensure the success of the closing day, make sure to read and understand all the paperwork and don’t hesitate to ask questions about things you don’t fully understand. Mainly, keep a close eye on the closing disclosure and see if your lender changed anything since giving your loan estimate.

Some changes are common, but if you see significant changes regarding your rate and other fees, ask for an explanation and only sign the disclosure if you’re satisfied with the reason for the changes. Otherwise, it might be better if you walk away until you find a deal that you could comfortably afford.