Closing on Your New Home

What to expect in the days before closing

You’ve found a home that satisfies your need and preferences, agreed on a purchase price with the seller, and been approved for a mortgage. Now it’s time to finalize the sale. Closing is the final step in purchasing a home, where you sign all of the loan paperwork and take possession of the property. This is everything you’ll need to know about closing.

You’ll need to acknowledge your Closing Disclosure

Your lender will send you a document called a Closing Disclosure before your closing, which summarized the final costs of your mortgage.

It’s vital that you acknowledge receiving this document as soon as possible. Your mortgage company is required by law to provide you with the Closing Disclosure three business days before closing, so you need to acknowledge receiving it quickly to avoid delaying the closing.

Can closing costs change between the Loan Estimate and the Closing Disclosure?

Yes, but changes should be small. The costs detailed in the Closing Disclosure should be within 10% of the estimates that were provided in the Loan Estimate.

Do a final walk-through of the property

Generally you’ll have the opportunity to do a walk-through inspection of the home up to one day prior to closing, to make sure everything is as it should be. This allows you to ensure the property is in the condition it was supposed to be in, as per your purchase agreement. You should ask the following questions as you do the final walk-through.

• Were any agreed-upon repairs completed by the seller?
• If you requested certain appliances, window treatments, or other items be included in the sale, did the seller leave them in the home? And are they in the condition you expected?
• Was there any damage to the property as the seller was moving out?
• Do all the faucets and light switches still work?
• Is the garage door functional?
• Did the seller remove paint cans, cleaning products, construction materials, and any other hazardous materials?

If you identify significant issues during the final walk-through, you may want to ask to delay the closing, or get in touch with the seller’s agent to resolve the issues or negotiate a solution.

What to bring to closing

Some items you’ll need to bring to closing are:

• The Closing Disclosure from you lender, to verify the final paperwork against
• A list of important contacts like your lawyer and your real estate agent, in case you have questions or concerns
• Valid government issues photo ID, normally your driver’s license
• Payment for your down payment and closing costs, normally in the form of a cashier’s check or proof of wire transfer

Who will attend the closing

Typically all buyers on the loan will need to attend closing. In a situation where a buyer cannot attend closing, they will need to give a representative who can be present power of attorney.

Depending on state laws, both the buyer and seller will be at the closing, or the buyer and seller have separate closings. So you may see the seller at closing, but you may not.

Generally there will be a closing agent to oversee the closing. They will be a neutral third party there to assist both the buyer and the seller with the closing process. Your real estate agent can attend the closing, but they don’t need to be there.

Costs you’ll pay at closing

You’ll get the keys to your new home at closing, and you’ll pay all closing costs. The following are the most common costs paid at closing.

Down payment: Your down payment becomes your equity in the home.

Escrow funds: These funds will be held in an account by your lender, to guarantee there is adequate money to pay insurance and tax bills as they come due.

Third party fees: These are costs for services your lender uses in processing your loan. Generally they include title insurance costs, credit report costs, and appraisal fees.

Discount points: Points are fees you pay to lower your interest rate. If you’ve chased to pay these, you will pay them at closing.

Per diem interest: You’ll pay an amount equal to the daily interest charges on your loan between the date of closing and the date of your first mortgage payment.

Homeowners association dues: If your home is in a neighborhood with HOA dues, you may need to pay a quarter or full year of dues at closing.