Columbus Homes For Sale | Home closing Tips

Survival guide to a real estate closing

Buying a house is hard work; closing on one is like taking a final exam. What can you expect when you get there -- other than

writer's

cramp?

The closing is the end of the long and arduous process of buying a house. It refers to the day you close the deal on a piece of

real estate

and on the mortgage to

buy that real estate. Essentially it's the final transfer of money and keys. When you walk

out of the agent's office,

you own a new home.

Just like every mother has a labor story, every homeowner has a tale of woe and wonder about a closing. For a first-time home

buyer who

has heard these stories,

the closing takes on a peculiar mystique complete with anxiety and drama.

Let's start our guide to the big day with the most important piece of advice: You'll want a good night's sleep before closing. It's

an exciting

and stressful time during

which a lot of legal and financial information will be thrown at you. Many folks, who actually

attempt moving on the

day of the closing, double the anxiety, workload

and chance of error. So rest up.

Timing is everythin

Timing is critical when scheduling the transaction. Here are a few things to consider:

Current living situation

If you are renting, you'll want to schedule the closing around the time your lease ends. If your plan is to do some work on your

new home

before moving in, pick a

date a couple of months before you have to move from your rental.

If you'll be moving out of a house that you are selling, you'll be juggling two closing dates. Most folks need the cash out of the

first house to

pay for the second

house, so schedule the closings in the right order. But beware; two closings in one day will

make for a headache.

However, it's over in one fell swoop.

Mortgage considerations

Make sure the closing date is set before your lender's commitment -- or any interest rate lock -- expires.

Work schedule

Though most well-run closings last only about an hour, you don't want to try to squeeze this into a lunch break. Things can go

wrong. And

hey -- this is a huge day

in your life, so take at least half of it off from work.

Moving

If you plan to move the day you close, schedule the paperwork as early in the day as you can.

Year end

If you are scheduling a closing at the end of the year, keep taxes in mind. Any points and interest paid before the New Year can

become

deductions for this year's

taxes. Check with a tax adviser for the timing of any other deductions.

Sign here ... and here ... and here

Most closings are actually two closings. You'll be closing on the purchase of real estate, and you'll be closing on the mortgage

loan you are

taking to buy that real

estate. All that paperwork will have to do with one or the other. Some documents are

common to most closings, and

other documents will be unique to your area or

situation.

Mortgage documents you can expect to see, read and sign, will include:

Truth in lending statement, also known as Regulation Z.

This important piece of paper will disclose the interest rate, annual percentage rate, amount financed and the total cost of the

loan over its

life. These are important

numbers to check and double check before signing. This is not a time for surprises.

Itemization of amount financed.

This document is like an addendum to the Truth in Lending statement. It summarizes the finance costs, such as points.

Monthly payment letter.

This document reveals the break down of your monthly payment into principal, interest, taxes, insurance and any other

monthly escrows.

Again, look for any

surprises.

Note.

Take a deep breath when signing this. This is where you're actually borrowing the money -- and giving your personal guarantee

to pay it

back. Gulp.

Mortgage.

Take a second deep breath with this one. This paper puts a lien on the house as security for the loan -- allowing the bank to

foreclose if you

default on the note

mentioned above.

Then there are the real estate documents that will finally make the house yours. Yippee. Now it's getting fun.

HUD Form 1 or Disclosure/Settlement Statement.

This is another one to read carefully (though, of course, all these papers are important and need to be read). The form will

contain all the

actual settlement costs

and amounts. Again, this is a paper ripe for typos and errors. The closing agent will go

over this document with the

buyer and seller. Do pay attention.

Warranty deed.

This is the document that brought all these people to the table. This document should include the names of the buyer, the

seller and a

description of the property.

Often this deed also guarantees that the seller has the right to sell the property. With

the signatures of the

seller and buyer, this piece of paper transfers the title of

property. Savor this particular signing; it's the

real deal.

Proration agreements.

These describe how you and the seller are divvying up the costs of the house for the month in which it is being bought. For

example, the

seller may have already

paid the property taxes, so the buyer needs to reimburse the seller for the portion of the

tax bill that covers the

time after the buyer takes over the property. Or in

reverse, the seller may not have paid the quarterly

homeowner's association fees yet.

The buyer will be paying this, but at the closing, the seller reimburses for the

period he was

still living in the house. In the end, lots of little

bits of money may go back and forth across the table -- at least on paper.

Tax and utility receipts.

You'll probably also be signing various city and state receipts acknowledging that this or that has been paid by the seller or will

be paid by

the buyer.

Name affidavit.

Here's where too many legal technicalities get annoying. This document is certifying that you are who you say you are.

Acknowledgment of reports.

More legalese assures that the buyer has seen all of the reports regarding the property. These can include surveys and a

termite inspection.

Search or Abstract of Title.

This one would make excellent bedtime reading for an insomniac. The abstract gives a listing of every document that has been

recorded

about this particular piece

of property. Don't worry, this doesn't obligate you to anything, but it does give you the

history of the house.

Hand over the money

The closing is not the day to forget your lunch money. The buyer and sometimes even the seller are expected to have some

dough ready to

hand over during this

fateful meeting. You should be informed of the amount you need before the meeting. If

you are not, call and ask.

You'll want to bring a certified check for the correct

amount.

Here are a few things a buyer will be paying for at the closing

Closing costs.

Expect to pay a portion of the closing costs. These can vary from state to state and even from county to county. Also, most

are negotiable

(ahead of time), so

closing costs can vary greatly.

Payment for the house.

The buyer brings the down payment (if any) at this time, minus any earlier deposit(s). It is given to the closing agent, along

with the lender's

check for the balance.

Escrows.

Often the buyer's annual taxes, insurance and other items are paid through the lender. An escrow account (or reserve) will be

established at

this time.

Smile.

Now you get the keys.

A closing may be the end of the house hunt and buying process, but it's the opening curtain on your new life as a

homeowner.

Surviving The Closing

The Anders Team
614-527-0811

Real Estate Essentials for Home Buyers!

The Buying Process

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