1 month out: Avoid any major life or financial changes
This includes changing your job, opening new lines of credit, or making any large cash deposits or withdrawals. Lenders typically do last-minute checks of their borrowers’ financial information in the week before the loan closing date, including pulling a credit report and reverifying employment. You don’t want to encounter any hiccups before you get that set of shiny new keys.
1 week out: Gather and prepare all the documentation, paperwork, and funds you’ll need for your loan closing
You’ll need to bring the funds to cover your down payment, closing costs and escrow items, typically in the form of a certified/cashier’s check or a wire transfer. You’ll also need to present government-issued identification, such as a driver’s license or a passport, and proof you’ve purchased a homeowners insurance policy. Your loan officer or lender will be able tell you everything you should bring to your loan closing appointment, including the exact amount of the funds you owe.
3 days out: Review the closing disclosure document
The closing disclosure shows your loan terms, final closing costs and any outstanding fees you owe. You’ll receive this document at least 3 days before closing, so you have time to thoroughly review your loan information before your closing – once you sign it, there’s an official 3-day waiting period before you can sign the rest of your loan documents. If you have questions about any of your mortgage loan information on the closing disclosure, this is the time to ask your loan officer or lender.
The closing disclosure shows the actual cost breakdown of your mortgage loan, including:
- Closing costs
- Estimated taxes, insurance, and other fees
- Interest rate
- Loan amount
- Monthly payment amount
Closing day: Review final paperwork, sign, repeat
Pro tip: Make sure you set several hours or even half a day aside for your appointment on the day of closing. There will be lots of paperwork to review and sign, and you’ll want to make sure you can take your time. A combination of the following people may also be present at your loan closing:
- Attorneys (yours or the lender’s)
- Seller’s real estate agent
- The loan closing agent
- Title company representative
- Your loan officer
- Your mortgage lender
- Your real estate or buyer’s agent
Once everyone gets settled in, the real work begins: You’ll need to review each of the following documents carefully, then sign
- Closing disclosure: An itemized list of the terms and costs of your mortgage
- Escrow statement: At closing, many buyers provide funds for future taxes and insurance. Those funds sit in a third-party escrow account until the lender or loan servicer taps into them to pay the fees on the borrower’s behalf
- Mortgage note: A legal agreement to pay the lender
- Mortgage or deed of trust: A document that puts a lien on your property as collateral for your loan so the lender can make claims against the home if you don’t follow through with the agreed-upon mortgage terms
Once you’ve signed all the paperwork, boom – you’re done! Congrats on officially becoming a homeowner. And don’t forget: Garbage day is every Thursday.
Sources: consumerfinance.gov, trulia.com
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