Understanding the Mortgage Closing Process
Buying a home is one of the most exciting time in a person’s life. Most people get mortgages to buy their homes as it is very convenient and beneficial to both parties.
Once your mortgage loan application has been approved and you have a commitment letter from your lender, you have to undertake the final step to owning your house.
“Leap and the net will appear.” — Zen Saying
Closing a Mortgage Loan
Closing or settlement is the final step in the mortgage process where all parties involved sign legal documents and officially transfer ownership of the property to you. Understanding the closing process is very important as it ensures the entire process goes on smoothly and on time.
Because closing of a mortgage is a legal process, your closing agent will ensure all legal procedures are followed and that the seller executes the deed to the property, ensure funds are collected and disbursed to relevant parties and record all required instruments that give you legal ownership of the property.
Parties Present At Closing
During the mortgage closing process, the following parties have to be legally present or represented.
· The closing agent- the closing agent can also be an attorney representing you, title company or the lender
· Title company representative- they provide evidence of the ownership of the property
· Real estate agent of the seller
· The lender
· Mortgagor (you)
Having a good closing agent is essential in any closing process as they are the ones who undertake the actual closing. Your involvement during the settlement process is mainly to review and sign the several documents associated with your mortgage loan.
Documents Needed During Mortgage Closing Process
Regardless of the state or jurisdiction, there are several documents that must be presented in the mortgage closing process.
· Title Insurance Policy- every lender must have a title insurance, the company issuing the title insurance will have verified the seller as the legal owner and that there are no claims or liens against the property.
· Homeowners insurance- the lender will need a homeowners insurance for the property to cover the property value in case of damage
· Housing Inspection Certification- this proves that the property has been inspected and certified as being in good condition and has structural integrity. it is however advisable that you and your closing agent make a final inspection 24 hours before the actual closing to make sure any required adjustments and repairs have been done.
· HUD-1 settlement statement- This form is a federal requirement that provides details of the transaction which includes, the selling price, financing amount, loan fees and Bi-weekly mortgage payments. It must be dully signed by the seller and buyer
If you are unfamiliar with the mortgage closing process, it is advisable to contact the best closing agent who will guide you and ensure your property is transferred to you in a timely and legal manner without any hitches.