Home Buyer's Guide
Closing on Your Home
What Happens in the Days Before Closing
You found a home that meets your needs, got your offer accepted and got approved for a loan. Now, you're finally ready to sign on the dotted line. Closing is where you'll sign all of the mortgage paperwork and, in most cases, take possession of the property. Here's what you need to know about closing
Acknowledge Your Closing Disclosure
Before your closing, you'll get a document called a Closing Disclosure, which will include a summary of the final costs of your loan.
It's important to acknowledge that you received the document as soon as possible. Your lender is legally required to give you the Closing Disclosure three business days before closing, so if you don't acknowledge receipt of your Closing Disclosure quickly enough, your closing could be delayed.
Attend a Final Walk-Through
In most cases, you'll get to do a walk-through inspection of the property up to one day before closing to make sure everything is in order. This is to make sure the property is in the condition that was stated in your purchase agreement. Here are some questions to ask as you take one last look at the property before closing:
- Were all the agreed-upon repairs completed?
- Did the sellers leave behind all appliances, window treatments, etc., that were specified in the purchase agreement? Are these items in the condition you expected them to be in?
- Did the sellers damage the property in the process of moving out?
- Do the lights and faucets work?
- Does the garage door open?
- Has the seller removed all hazardous materials, such as old paint cans and construction materials?
If there are any major issues, you can ask to delay the closing or contact the listing agent to negotiate a fair solution.
What and Who to Bring to Closing
What You Should Bring
These are some items you must bring to closing:
- Your driver's license or other valid, government-issued photo ID
- A cashier's check or proof of wire transfer to pay your down payment and closing costs
- Your Closing Disclosure to compare to the final paperwork
- A list of key contacts, such as your agent or lawyer, in case you have questions
Who Should Attend
In general, all buyers who are going to be on the loan should plan to be at closing. It's possible to close if you can't be present, but you'll need to give someone power of attorney.
In some states, the buyer and seller will both be at closing, whereas in other states each party attends a separate closing. In other words, you might see the seller at closing, but it's not a guarantee.
You can expect a closing agent to facilitate the closing. They're a neutral third party who will help both buyer and seller along the way. And of course, your real estate agent can attend, although this is not required.
What You'll Pay for at Closing
At closing, you'll get the keys to your home, and you'll also need to pay any closing costs. Here's a breakdown of the most common upfront costs:
- Down payment:
- Your down payment will become the equity you have in the home.
- Escrow funds:
- Your lender will collect these funds at closing to ensure there's enough money in your account to pay tax and insurance bills as they come due.
- Third-party fees:
- This covers costs from third parties your lender uses to process your loan. These fees typically include appraisal fees, title insurance costs and credit report fees.
- Per diem interest:
- You'll pay daily interest upfront to cover the period between closing and the date your first mortgage payment is due.
- Homeowners association (HOA) dues:
- If you're moving somewhere that has HOA dues, you may be required to pay a year's worth of dues at closing.
- Discount points:
- A point (or discount point) is a fee paid to lower your interest rate. If you've chosen to pay points, you'll pay for them at closing.