You’re steps away from the finish line. After searching, researching and working with your team of professionals, the home of your dreams is nearly secured. You can almost taste it; homeownership is on the horizon.
So how do you seal the deal and maintain mortgage confidence once the new place is purchased? Below we have compiled helpful information and steps to secure and preserve your property long after the offer is accepted.
Closing
Once the lender reviews your loan application and secures the funds for your mortgage, the closing process begins. Only a visit to the title company stands in the way of getting those new keys in your hand. Ready, set … close!
Who will attend the closing:
- Title agent reviews the contract, issues title insurance policies, receives funds and issues payments to all involved parties in the transaction, and facilitates the closing
- Real estate agents attend the closing to answer any questions, assist with any last minute issues and celebrate with their clients
- Buyer(s) and seller(s) sign the documentation required to complete the transaction—they are the most important participants at a closing!
- Loan Officer attends the closing to answer any loan related questions, assist with any last minute issues and celebrate the successful purchase of a new home
What to bring:
- Government-issued identification: U.S. passport or state issued ID/driver’s license – cannot be expired. Also, must include the same name as the purchase contract and closing documents
- Certified funds for down payment and closing costs: Money can be brought to the closing in the form of a cashier’s check or wired to the title company prior to closing. Check with the title company for their guidelines. Also, wire fraud has become an issue in the past few years. Be sure to verify wire instructions directly with your title agent!
What you will sign:
- Documents related to the property, including: deed (transfers title from seller to buyer, ownership is then recorded with the county), transfer tax declarations and title insurance documents
- Documents related to your new mortgage, including: Promissory Note (promise to repay the mortgage), disclosures (many of these are updated versions of what was signed at the beginning of the mortgage approval process like your application, tax transcript form, etc.), final closing disclosure (a form itemizing all financial figures in the transaction including purchase price, closing costs, prepaid items, lenders fee, credit, earnest money, credits, etc.)
Don’t be afraid to ask questions and be sure to read all documents prior to signing.
Most loans have closing costs, which are additional out-of-pocket expenses. Be prepared to cover fees for inspections, applications, insurance and the cost of filing the mortgage. If anything seems confusing, the Elevations Mortgage team is happy to help.
Post-Close Service
A final review of your loan documents will be done for compliance. In addition, any missing information or files may be obtained.
It’s important to note that depending on the lender, many things could potentially happen to your mortgage after the loan has closed. It’s common for the lender to sell your loan. Do not be concerned. This is a common post-close practice. This type of move shouldn’t have an influence on you—you’ll still be obligated to make your single payment each month, and you’ll receive a monthly mortgage statement with the amount of those payments.
Paying the Mortgage
Depending on what amount you have borrowed and the type of loan, paying off a mortgage can take 15 to 30 years. This is by far the lengthiest step in the entire process. It’s your responsibility to make monthly payments, which typically include your taxes and homeowners insurance. In some cases, you might be responsible for paying and maintaining homeowners insurance and paying your taxes outside of your mortgage payment. Once you repay the full balance of your mortgage interest including interest, the lien is removed from your property, and you’ll own your home completely.
You should also be aware that the terms of your mortgage cannot change based on the investor or the mortgage servicer. What can change is where you send your monthly payment. Watch for notices related to mortgage servicing!
Finally, although the terms of your mortgage will remain the same during the life of the loan, your monthly payment might change. For instance, if you have an adjustable rate mortgage, the amount collected for principal and interest will adjust once the fixed period ends. Escrow accounts are analyzed annually. When payments due for taxes and insurance increase, the amount collected monthly will also increase.