What Happens At Closing

INTRODUCTION

Once your application for a mortgage loan has been approved and you have received a Homeowners Mortgage commitment letter, the final step before you can call the house your own is the closing, or settlement, of the purchase transaction and mortgage loan. Even though you have a signed purchase agreement and your loan request has been approved, you have no rights to the property, including access, until the legal title to the property is transferred to you and the loan is closed. You should have a good understanding of what is involved in the closing process, because there are a number of things that you can do to make sure that it goes smoothly and on time.

At closing, you will sign the mortgage loan documents, the seller will execute the deed to the property, funds will be collected and disbursed and the closing agent will record the necessary instruments to give you legal ownership of the property. Settlement of a mortgage loan is a legal process, so specific procedures and requirements will vary according to state and local laws, but a general description of closing practices can help you through the process.

BETWEEN COMMITMENT AND CLOSING

As soon as Homeowners Mortgage clears your loan to close you should confirm the actual date of loan closing. An estimated closing date was probably specified in the sales contract, but a firm date needs to be set by you and the seller of the property. You want to make sure that settlement will take place before your loan commitment expires and before any rate lock agreement (guaranteed terms of the loan) expires. Your Loan Status has your scheduled closing date. The settlement date also has to allow adequate time to assemble all of the required documentation. If repairs or maintenance on the property are a part of commitment, there must be time to complete them. The real estate agent involved in the sales transaction are often the best people to coordinate the closing arrangements. We require at last 3 to 5 days advance notice of the closing date in order to prepare the loan documents and get them to the closing agent. If your closing date has changed please send us an email from the main page by clicking on the Help link.

There are standard documents and exhibits that are commonly required for a loan closing, regardless of jurisdiction. Some of these will be your responsibility and others will be the responsibility of the seller. The following documents are typically required for closing.

Title Insurance Policy

Every lender will require title insurance, including Homeowners Mortgage . The company issuing the title insurance policy will have researched legal records to make sure that you are receiving a clear title, or ownership, to the property. Their title search has established that the seller of the property is the legal owner, and that there are no claims, or liens, against the property. The title company offers both a lender's policy and an owner's policy. You will have to pay for a lender's policy and it is advisable for you to have an owner's policy as well. For a small additional premium, it will protect you up to the full value of the property if fraud, a lien or faulty title is discovered after closing.

Homeowner's Insurance

Homeowners Mortgage requires, as all lenders do, you to have homeowners insurance on the property at least in the amount of the replacement cost of the p