What happens at that moment where you sign the paperwork and become a homeowner?

Basically there’s a couple things to mention leading up to your closing day that are very important to keep in mind:

The first of which is that you’re going to receive a disclosure that has to arrive to you at least three business days prior to closing called a closing disclosure. What the closing disclosure shows you is, first of all, the terms of your loan, so you’re aware of what your interest rate is in the loan and what kind of payment you’re going to have on the loan, as well as the different fees and costs associated, and then how much you’re going to have to bring to the closing to close on the transaction.

Once you get that disclosure and understand all the numbers, you will then need to arrange to bring that money to closing, if you do owe money at closing, in the form of certified funds.

What certified funds are, it’s either a cashier’s check or a wire to the title company, like the title company in the background of this video, Title Company of the Rockies. The title company is the entity that handles your closing. They handle the signing of the documents, the disbursement of the money to all the different parties, so you have to arrange for what we call certified funds, or good funds is another word for it, because title companies cannot accept personal checks for this type of transaction. In some cases for a very small amount, they will, but typically, for most real estate transactions, you have to get certified funds.

Once you arrange for that, you will then have a time set up to go to the title company and have the closing documents signed. Before you go to the title company, typically, with your real estate agent, you’ll perform what’s called a walkthrough of the property to make sure the property is still in the condition that you expected, that the seller has moved all their stuff out of the property, and those kinds of things to make sure that when you buy the house, it’s what you expected. You will then go to the title company, and like I was saying, the title company does two main things that are important for closing day. They orchestrate the signing of the paperwork, the documents, and they also handle the disbursement of the money. They collect all the money from the parties that owe money, like you as the buyer, and the lender funds, and then they disperse them to all the parties that are receiving money, like vendors involved in the transaction, and of course the seller.

After you sign the documents, some lenders require that the documents are reviewed. Some do not, depending on the type of loan you’re obtaining. And once those documents are reviewed, the lender authorizes what they call funding. They authorize the disbursement of the money. And at that point, you receive the keys, and you’re a homeowner, and then you can start moving in your stuff and experience your new home.

That’s essentially how it works on closing day. If you have any questions regarding that or anything else homeowner related, just give me a call. That’s why I’m there. You can also text me and email me. 303-670-0137 or rbaxter@choicemortgage.com

Posted in Blog