How to Prepare for a Smooth Mortgage Closing
So your underwriter gave you the clear to close on your home loan? Congratulations! Closing on a mortgage might seem overwhelming, especially for first time homebuyers, but with proper preparation, it can go smoothly. Here are a few tips to help you prepare for a smooth closing:
Understand the Closing Costs
Closing costs are fees that are paid at the time of closing and will be given to you as an estimate at initial disclosure as well as on your final closing disclosure towards the end of the approval process. They can vary depending on the lender, the property, title company and homeowner’s insurance companies that you choose, and the location. Some common closing costs include:
- Origination
- Appraisal (sometimes paid upfront)
- Title & Attorney costs
- Recording information
- Transfer taxes
- Prepaid interest
- Escrow (upfront property tax and homeowners insurance)
It is important to understand the closing costs associated with your loan so that you can budget accordingly as these costs are separate from your down payment.
Review Your Loan Documents
Before closing, you will need to review your loan documents. This includes the loan estimate and the closing disclosure (CD). These documents will outline the terms of your loan, including the interest rate, the loan amount, and the monthly payment. Make sure that you understand all of the terms of your loan before signing any documents. If you have any questions, do not hesitate to ask your Ellason Mortgage Group Loan Officer.
Schedule a Closing Time
Once you have the clear to close, you can schedule a closing time. Your Ellason Mortgage Group loan officer and realtor (if purchasing) will be able to help you schedule a time that works for all parties. It is important to arrive at the closing on time. If you are late, it could delay the closing process.
Bring a Cashier’s Check or Wire Your Cash to Close
For closing day, you will need to bring a cashier’s check (if the title company allows) or wire your cash to close prior to closing date. Make sure that the check is made out to the correct party and that it is for the correct amount. If cash to close is to be wired, be sure to complete this task a minimum of 24 hours prior to closing to ensure that it arrives on time. Additionally, when wiring, be sure to contact the title company to confirm wiring instructions so that the money is wired to the correct location. The amount of cash to close will be determined by your lender and will be on your closing disclosure, and if there is any overage, the title company will cut you a check back for the difference.
Remember, a smooth closing is within reach with proper preparation. Understanding closing costs, reviewing loan documents, scheduling efficiently, and arranging payment are crucial steps. By actively participating in the process and asking questions when needed, you can confidently navigate the closing day and embark on your new homeownership journey.
