ACU of Texas Blog

What to Expect When You Close on a Home Loan

Posted on April 05, 2018

As the name suggests, a closing is the last step in purchasing and financing a home! In the case of a home loan, a closing day concludes a home purchase and the closing of a loan on the same day. Closing day is deemed one of the most important days of the purchasing process, and can be very exciting.


A few preliminary steps given below can help prepare future homeowners and give an idea of what to expect at closing:


Preliminary Document Analysis

Documents such as contracts, evidence of mortgage and homeowners insurance, closing disclosures and inspection reports are usually available for buyers in advance. They should go through these documents in detail to ensure that there are no ambiguities.


A Final Walk-Through

Buyers are usually permitted to undertake a final walk-through examination of a home. This walk-through is provided at least 24 hours before the closing day and buyers are expected to point out anything that deviates from the contract that a buyer intends to sign. It also includes potential damages or repairs.


Closing Costs

Buyers may be expected to pay an additional cost for closing a home loan. The particular closing cost may vary depending on lender’s policies and location. The buyer should have money available for closing costs before the closing day of a home loan, which is typically when this payment is made. 


Which Documents Are Necessary?

The entitled organization’s official and the loaner’s representative provide the list of all the documents required on a closing day. These documents generally include the following:

  • Closing Disclosure: A document containing all details regarding the monthly payments, closing costs, mortgage loan, and loan terms. Buyers are expected to receive it a few days before the closing day.
  • Deed of Trust: A document that provides the lender with a claim against the title in case a buyer fails to fulfill commitments.
  • Certificate of Occupancy: A legal and official paper for buyers moving to a newly-built home.
  • Mortgage Note: Contains the terms and conditions of a loan in addition to the steps that lenders can take in case of failure of payment. It is the commitment of a mortgagor to repay the loan.

Avoid Potential Difficulties

Buyers are expected to be attentive and particular about every aspect of the closing-day arrangements. A lack of attention to detail might result in last minute annoyances, disagreements, and delays which, of course, no one prefers. The prospective stumbling blocks faced by the buyers might include:

  • Inability of the buyer to make a full payment
  • Non-clearance of property lines by seller
  • Failure of buyer to complete walk-through
  • Last-moment withdrawal of lender financing

Such drawbacks can be avoided when all involved parties participate in a detailed conversation regarding the loan and its accompanying documentation.


Summary

The closing day of a home loan can be an exciting occasion for the buyer! Be sure to ask your Mortgage Specialist about what you should expect on your closing day.  

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