The Closing
What does the buyer need to do at the closing? To some, it seems like you need to sign your life away. Truth is, that you will be signing lots of documents. A closing is basically about the buyer signing the papers required by the lender to get the check to buy the house. All the action between the buyer and the seller is more or less complete at the time the purchase agreement was signed. After that, almost everything both the buyer and seller have been doing is to reassure the bank that the buyer has good credit, that the house is worth the money, and that overall it will be a good deal for the lender.
This includes the home inspection, the lead paint certification, the radon tests, the house appraisal, the plot plan, the smoke alarm certification, and more. These things help the lender gain confidence that the house is worth more money than the loan. This protects the lender in case you (the buyer) default on the loan. As long as the house is worth more than the loan, they can sell the house and get their money back.
On closing day, you (or your realtor or your attorney) will bring a variety of documents to the meeting, and sign a bunch more. These documents include:
- Proof that you have homeowner's insurance - you need to get this in advance of the meeting. The lender wants you to protect the value of the property by insuring it
- Title insurance - this is insurance that protects you (and the lender) in case problems are found at a later date with the title
- Various certifications, including: lead paint, smoke alarm, radon, and possible others.
- Your downpayment
- The settlement statement - this is a document that shows what happens to all the money. Who gets it and how it is distributed. This includes of payment of closing costs.
- The deed to the property
The array of paperwork can be bewildering. The key is to prep in advance of the meeting with your real estate attorney so you know what to expect. This makes the whole process much, much easier. Nonetheless, make sure you block out enough time for the closing. You won't be done in 30 minutes. Allow 1 to 2 hours. This will allow you to get through everything without rushing it. Once you are done, you can grab the keys and go check out your new home. Congratulations!
If you have not yet applied for a loan, make sure you consider offers from multiple lenders. Online services exist that allow you to use an online form to get quotes from up to 4 lenders. Getting multiple loan rate quotes improves your chances of getting the best possible rate.
