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Saturday, July 4th, 2015


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Buying a New Home: Closing Day

You’ve found a home, put in an offer and had it accepted, and gone through inspections. Finally, it’s real estate closing day—the light at the end of the tunnel. 

On closing day you can expect to sign two sets of documents:

  • the purchase of the real estate
  • the mortgage loan you will be taking on to pay for the real estate

 

At the closing table, there should be an attorney to walk you through each of the following documents, but here is an overview of what you will be expected to read and sign. These are the money documents:

  • Truth in lending statement, also known as Regulation Z: Discloses the interest rate, annual percentage rate, amount financed and the total cost of the loan over its life. Make sure that these numbers should match the numbers that you have already received from your loan officer.
  • Itemization of amount financed: Summarizes the finance costs, such as points, and is more of an addendum to the document above.
  • Monthly payment letter: Breaks down your monthly payment, again make sure that these numbers match the ones that you received previously.
  • Mortgage note: This document indicates the amount and terms of the loan and contains your repayment promise.
  • Mortgage: Secures the note; if you default on your mortgage the bank will place a lien on your new home as security for the loan.

 

These documents make the real estate yours:

  • HUD Form 1 or Disclosure/Settlement Statement: The actual settlement amount, again watch for errors.
  • Warranty deed: Transfers the title of the property from the seller to the buyer.
  • Proration agreements: Pro-rates money for the month that you are closing, i.e. home owner’s association dues, etc.
  • Tax and utility receipts: Transfers information from the seller to the buyer at the state level.
  • Name affidavit:  You swear that you are the person you claim to be.
  • Acknowledgment of reports:  Verifies that the buyer has seen inspection reports, termite reports, etc.
  • Search or Abstract of Title: Documentation of the history of the house.

 

Finely, it’s time to cough up a little cash:

  • Closing costs: Time to write that big check that you’ve been dreading.
  • Payment for the house:   The buyer writes a check for the down payment, minus any deposits, which is then combined with the lender’s check for the remaining portion of the purchase price.
  • Escrow Account: The buyer’s annual taxes, insurance and other items are paid through the lender. This account is set up at this time.

 

That’s it, the house is yours, breathe a sigh of relief, and start packing!

Buying a house? Visit our Mortgage Center.
Josh Anderson is a Realtor with Keller Williams Realty in Nashville TN.  If you have any questions about the real estate market, please call (615) 509-7000, email Josh@JoshAndersonRealEstate.com, or visit www.JoshAndersonRealEstate.com.

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2 Responses to Buying a New Home: Closing Day

  1. Pingback: Buying a New Home: Closing Day at Interblogs

  2. Mari says:

    First do not use a private nldeer if you can get Stafford Loans still. If you truly are in Default (as opposed to delinquent) then you will not be able to get any more student loans until you rehabilitate those. That means you have to make 9 on time payments (over 9 months) to become eligible to borrow more stafford loan funds.Second. Student loans CAN indeed be discharged by a bankruptcy but they usually are not. The judge can decide whether or not paying the student loans back constitute an undue hardship. If not, then they stay. Make sure you really are in default. In order to get there you have to blow off 9 months of payments that were due. And if you can prove that you should have had a deferrment and it’s the nldeers fault for not recording it when other nldeers did then that can get you out of default also. Stafford loans are not based on a credit history but a Financial Aid Administrator CAN refuse to certify the loan if they have a good reason to. A good reason would be something like a student telling the financial aid office I’m never going to pay these back . Bankruptcy by itself is NOT a good reason. And by the way, if you don’t get the loans discharged in the banruptcy, you WILL end up paying them back though wage garnishment or your tax returns being kept by the government for the rest of your life so you might as well make it easier on yourself and pay them back on time and avoid the interest and late fees. Baron

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