You’ve
found a home, done all the inspections, your
loan is approved, and now it is time to
complete the transaction. If your lender and Realtor
have done their jobs the actual closing of your
loan and the purchase transaction should be
somewhat anticlimactic. For most people it will
be just a bunch of papers to sign. If all of
the details have not been worked out a head of
time it can be a stressful time and an
unpleasant ending to what should be a very
joyous occasion. Before dealing with what
actually happens we will cover the mistakes
that can be avoided.
Biggest
Mistakes
The biggest
mistakes that happen at a closing happen due to
rushing things. While your Realtor, Lender and
Seller all want the transaction to go smoothly,
this is a very important day for them. This is
the day they all get paid for their efforts.
Many times they will push to close for their
own benefits and not that of the buyer.
Be flexible,
purchasing with mortgage financing is still a
very paper intensive project. Occasionally an
unforeseen delay may occur in order to get the
proper paperwork ready. Be prepared to have
your closing date or time changed.
Closing on the
last day of the month. Avoid this day if at all
possible. This is the busiest day for the
Lenders, Title and Escrow companies. When
people are overworked mistakes can happen. Try
to close a few days before the end of a
month.
Resolve all
issues prior to closing. Be sure that any
outstanding issues are resolved before going to
closing. It’s harder to get things done
after closing and you don’t want to be
negotiating things at the closing table.
Get a final Good
Faith Estimate from your Lender or Broker 2
days prior to closing. While these numbers will
not be perfect they should be reasonably
accurate. You do not want to be surprised at
closing that your need an additional $2,000
-$3,000.
The
Closing/Signing
Generally there
are two common ways to finalize your Real
Estate transaction.
One is an Escrow Closing the other is
generally referred to as a Round Table
Closing.
Escrow
Closings: These are most common in Western
States but are growing in popularity. An escrow
company is an intermediary who handles all of
the documents between the Buyer, Seller, and
Lender and Title Company. In an escrow closing
the buyer and seller are scheduled to come in
for the “Signing” at different
times. Once the documents are signed the Escrow
Company sends the loan package back to the
Lender for review. The Lender reviews the
documents and if all is satisfactory, notifies
the escrow company they are ready to fund the
loan. The escrow company confirms to the Lender
that they are ready to record the Mortgage/Deed
of Trust and Grant Deed and receive the funds
from the Lender. Once the Escrow Company has
the necessary funds from all parties, they
record the required documents at the county
recorders office and “go on
record”. The transaction is now
“Closed” and all funds are
disbursed to the appropriate parties.
Loan Process 
