What to expect when you close on a home purchase

Clear to Close
What to expect when you close on a home purchase

Whew! You made it.

You were preapproved for a loan, and you made it through the application process and the deluge of paperwork that came with it. You found a home, made an offer and had your contract accepted. The home has passed inspection. You’re feeling like this might finally happen – you are going to be a home owner.

But there are still some final steps to get through – a few i’s to dot and a few t’s to cross – before you are handed the keys to your new castle. You can do this, you’re almost there.

So, what can you expect as you head for the home stretch? Here’s a look at what’s coming up in the last few days of closing on a house:

• First, the “closing” might also be called the “signing,” because that’s what you’ll be doing – lots of it. Sure, it might seem tedious, but signing all those documents is absolutely necessary for such a major transaction.

• At least three days out from your official closing, you should receive the closing disclosure from your lender. This outlines the terms of your loan, as well as the final closing costs, charges, fees, etc. READ IT. “It’s not uncommon for the property taxes and homeowner’s insurance amounts to differ from the original loan estimate,” according to thebalance.com. [1] So be sure to read these documents closely.

• This is about the time the homebuyer will do a final walk-through. Don’t overlook this step. If you find any big issues – perhaps the downstairs toilet is malfunctioning; maybe a promised appliance is broke (or missing from the home); or you found signs of a leak in the basement from a recent rain. In any of these cases, you can delay the closing until the issue is addressed, or request that the seller deposit money into an escrow account to cover any necessary repairs/replacements.

• On the day you close you will need to pay any closing fees and other fees associated with transferring ownership of the property that have not been included in your loan balance or loan amount. Typically, these payments are made by wire transfer or sometimes with a cashier’s check. The title company will let you know which form of payment they accept, so you can be prepared for the big day.

• The papers you sign – and there will be a LOT of them – at the table on closing day will be things like the property deed, a transfer tax declaration, mortgage agreement, closing disclosure and other forms.

• Once both you and the seller sign all the necessary forms, the home is transferred from the seller’s name to your name. Congrats! You’re a homeowner.

• A final note: You’re probably going to want things like lights, running water and cable TV when you move into your new home, so be sure to contact the utility companies, cable provider, etc., and transfer them into your name so you don’t have any interruption in services.

Who will be there on closing day?

This varies from state to state, but there are some representatives that usually won’t differ, including:

• Closing agent. This person (who might also be an attorney) may work for the lender.
• Your lender.
• Title company representative.
• The seller’s real estate agent.
• Your real estate agent.

“The most important thing to remember through the closing process is that there is no reason to feel overwhelmed,” says Alan LaFollette, Managing Director, National Mortgage Sales at First National Bank of Omaha. “If you chose a reliable lender with your best interests in mind, then they have been looking out for you every step of the way, and they have prepared you for this moment so that there are no last-minute surprises.

“For us, we don’t leave your side during this journey. This is a major decision in your life, and we want to make sure it goes as smoothly as it possibly can.”

Got Questions? Stop by your local First National Bank branch today and visit with a mortgage loan expert.

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