|
CLOSING
1. Complete the final walk-through
This will likely be the first opportunity to
examine the house without furniture, giving you a clear view
of everything. Check the walls and ceilings carefully, as
well as any work the seller agreed to do in response to the
inspection. Any problems that remain unresolved from the inspection
report should be addressed prior to closing.
2. Be prepared for closing costs
There may be closing costs customary or unique
to a certain locality, but closing costs are usually made
up of the following:
- Attorney's or escrow fees (yours and your
lender's if applicable)
- Property taxes (to cover tax period to date)
- Interest (paid from date of closing to 30
days before first monthly payment)
- Loan origination fee (covers lender's administrative
costs)
- Recording fees
- Survey fee
- First premium of mortgage insurance (if applicable)
- Title insurance (yours and your lender's)
- Loan discount points
- First payment to escrow account for future
real estate taxes and insurance
- Paid receipt for homeowner's insurance policy
(and fire and flood insurance if applicable)
- Any documentation preparation fees
3. Find a qualified closing agent, such
as an Attorney, or Title Company
In Virginia, both attorneys and lay settlement
agents working for title companies can close real estate transactions,
but only attorneys can offer legal advice. Your REALTOR®
may be able to recommend a closing agent. If not, shop around.
Find out what services are provided for what fee, and whether
the closing agent is experienced at representing homebuyers.
4. You may also want to consider a
homeowner's warranty.
A home warranty is a service contract, normally
for one year, which protects homeowners against the cost of
unexpected repairs or replacement on their major systems and
appliances, which are not covered under homeowner's insurance
and that break down due to normal wear and tear. For a list
of local companies, click here. Homeowner's Warranties
5. What to expect on closing day
You will present your paid homeowner's insurance
policy or a binder and receipt showing that the premium has
been paid. The closing agent will then list the money you
owe the seller (remainder of down payment, prepaid taxes,
etc.) and then the money the seller owes you (unpaid taxes
and prepaid rent, if applicable). The seller will provide
proofs of any inspection, warranties, etc. Once you are sure
you understand all the documentation, you'll sign the mortgage,
agreeing that if you don't make payments the lender is entitled
to sell your property and apply the sale price against the
amount you owe plus expenses. You'll also sign a mortgage
note, promising to repay the loan. The seller will give you
the title to the house in the form of a signed deed. You'll
pay the lender's agent all closing costs and, in turn, he
or she will provide you with a settlement statement of all
the items for which you have paid. The deed and mortgage will
then be recorded in the state Registry of Deeds, and you will
be a homeowner.
At closing you will receive:
Settlement Statement, HUD-1 Form (itemizes services
provided and the fees charged; it is filled out by the closing
agent and must be given to you at or before closing)
- Truth-in-Lending Statement
- Mortgage Note
- Mortgage or Deed of Trust
- Binding Sales Contract
- Keys to your new home
|
