What Happens On Closing Day?

Certified Mortgage Advisor
NMLS 1701021
Published 
July 28, 2019

Excited or anxious on closing day?

They were talking about what happens on closing day. So if you're looking at buying a house or maybe you're already near the finish line and about to have a closing on a deal, you're probably wondering what's going to happen exactly on the closing date. So in a nutshell,  if you're buying with cash, it's going to be really quick. You're going to have a couple of documents to sign, to transfer ownership over.

Closing when you're financing

But we're mainly going to be talking about if you're financing, what's going to happen on the closing date, and if you're a buyer? So what's going to happen is you'll set a closing date with your lender and your lender is going to give you the final numbers so that you know how much you're going to be paying out of pocket, along with all of the terms of the deal.

Closing Disclosure

What will happen before closing is you should be getting a document called a Closing Disclosure at least three days prior to closing. And the closing disclosure is going to lay out all of the details of your loan. It's going to show you your purchase price, your loan amount, interest rate, monthly payment, and all of your closing costs detailed along with the final cash due from you at the closing table.

Carefully review you documents

So make sure that you review that document before you get to the closing table and even bring that document in hand if you want to make sure that those numbers line up when you get there.

Who will be in the closing table?

So when you come to the closing table on the closing day, normally it's going to be you, your spouse, or anyone else who's, co-signed on the loan with you. And then usually the sellers are going to be there as well. And is normally the quickest way to do is to bring everyone together to sit down and sign the final documents. So most likely your realtor or attorney is going to be there. And the seller's realtor will be there as well. And the person who will be facilitating the closing is a settlement agent.

Settlement agent

So the settlement agent is going to be the ones, dispersing all the funds and handling all of the checks. So what will happen is you'll sit down normally on one side and the sellers will sit down on another side and you'll have the closing agent there and they're going to have probably a pretty nice stack of documents. So get ready to practice your signature a lot. Cause you're going to be signing a lot of documents and the documents that you'll be signing. Most of them you've probably already received from your mortgage advisor.

These are documents like things like your loan application. It's going to be the note that says you promise to pay back the loan. And there's going to be a lot of documents in there that continuously talk about the mortgage. That you'll pay back the mortgage and any details or penalties, if you have any late fees, basically, there's gonna be a lot of documents concerning the mortgage.

What do you need to bring to the closing?

You first need to bring your photo ID. Normally this is a driver's license. And then you also need to bring your cash to close and your cash to close the number that was given to you by your loan officer, to tell you exactly how much cash out of pocket is due from you to close on the deal. Now, this can be done usually in one of two ways.

Cashiers fund

The first way is through a cashier's check. So you need some certified source of funds to bring to the closing table. So you can have that cashier's check and hand to give to the closing agent.

How to wire funds

Sometimes if your cash to close is a little bit higher, you will wire those funds. And normally you do that a couple of days before your closing and you wire the funds to the title company and your mortgage advisor will be able to let you know which one you need, and the instructions on how to wire if you need to do so.

Final Deed how is it going to be transferred?

After you've gone through and you've signed all the documents, you reviewed everything, everything's comfortable for you. Then what happens is you'll be looking at the final deed and this is going to transfer from the seller to you, this is going to be the final wise document showing that you have ownership of the property. Most of the documents in that stack were going to be about the mortgage and the loan application.

And then as you get to the bottom, you'll start dealing with the documents that talk about the ownership, transferring from the seller to you. So that means that you're finally a homeowner at that point of that home.

Dispersing funds

Then what will happen as well as the closing agent is going to disperse funds. So different companies do this in different ways. Most often what happens is the money's dispersed right at the closing. So what's going to happen is the closing agent usually has a book of some checks. The seller is going to receive a check for their portion. The agent will ask for either your check from you or maybe a receipt of your wire transfer, and then if there are agents or any of them. Loan officers, anyone like that there, might receive their commission check at the closing table as well.

Congratulations! Here's your keys!

Then finally you get the keys to your home. So occupancy is going to be traded at the closing table. Then you can get the keys sometimes depending on your contract, the seller might have a couple of days to move out of the property before you move in. And if so, your realtor will be able to help you figure out when you can exchange keys. Any combinations or passcodes to garage doors and things like that.

Shake off those stress

So the closing day, there's really not a lot to stress about. Most of what's going to happen are you're going to be reviewing documents. You've already seen, that you're going to be signing as a promise and obligation to those documents that you've already agreed to. And then finally, you're going to be turning in the money for the cash to close. And then finally you'll receive ownership of that property.

Now, you can relax and enjoy your new home

It's a super exciting time. You've done all of the work to get to this point of the closing day. This is the most exciting part of the deal. So don't go into it feeling stressed or overwhelmed. You've already done the hard work.

All you have to do is show up with what was asked of you, make sure that you review everything just double-check that you're comfortable with all those numbers. If you have questions, ask your realtor, ask your mortgage adviser, and ask the closing agent to make sure that you understand and are comfortable going into that deal.

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