What is the Mortgage Closing Process?
A mortgage closing is the last step in buying a home:
At the end of the closing, the buyer becomes the legal owner of the home.
What Happens at a Mortgage Closing When Purchasing a Home?
At a mortgage closing (a real estate closing as well), all legal documents —both those related to the mortgage loan and those related to the transfer of
the property from the seller (the Nadler Trust) to the buyer (Rips) — are signed. These documents may include your mortgage note (a promissory
note you, the borrower, sign), in which you promise to repay your lender; the home deed (from the seller to the buyer transferring title tot he
property), which grants you ownership of the home; the Closing Disclosure Statement and ALTA Settlement Statement, which states that you
understand the closing process and financial obligations related to your mortgage and which itemizes all the costs related to the sale of the home.
It’s not just document signing. Money may also transfer hands: The buyer and sometimes the seller may pay costs related to escrow or closing to the
lender, and the lender gives the closing agent (in some cases, either the buyer’s attorney or the title company, depending on who is acting As the
closing agent for the closing, money to cover the mortgage amount. Other things that may occur: The buyer shows proof of homeowners insurance
(so, you must have H/O insurance in place prior to the closing naming the lender as the first mortgage payee;) so that the lender will fund the
mortgage loan, and the closing agent sets up an escrow account for the buyer, which will help the buyer pay taxes and insurance on the property.
The escrows for taxes and other monthly lender costs are shown on the Closing Disclosure and Settlement Statements. Finally, the buyer will
receive the title (the Deed) to the property; the seller or a representative of the seller will give the buyer the keys to the new place; and the closing
company, attorney or title company officially records certain documents such as the warranty deed with the county clerk where the real estate is
located.
How much money you the buyer bring to the closing will depend on the final numbers and figures that are shown on the draft of the Closing
disclosure form. At the bottom of the CD form, it will show the amount of funds that the buyer will need to bring to closing. Either that amount will be
required to be wired into the closing agent’s bank account (the closing agent controls the closing and disburses all the required expenses shown
on the closing statements) or a bank cashier’s check will be brought to closing.
Who Will Attend the Mortgage Closing?
Who attends a mortgage closing will vary depending on where you live, but in general, these parties are likely to attend a closing: The buyer; the seller;
the escrow/closing agent; attorneys for both the buyer and the seller (the attorney may be the closing agent); someone from the title company; the
mortgage lender; and real estate agents.