Given that everything goes smoothly on the negotiation and the purchase agreement has already been signed, you will be one step closer into becoming a homeowner. The last phase that you would have to deal with is called the settlement or the closing phase.
As the buyer, you would be required to sign documents pertaining to ownership, mortgage and other services involved in purchasing the house. You will also have to settle your accounts by paying the closing costs and the down payment.
Reminders to the Buyers
Before the closing day, there are certain things that you need to do to ensure a smooth flowing settlement process. First, you need to do your walk-through to ensure that the property is the same. Second, you need to secure enough funds to pay the closing cost and the down payment.
The Closing Process
The parties involved would usually meet in person. People present are:
• The seller
• The buyer
• The real estate agent
• The closing agent or the escrow agent
• The title company representative
This day will also be the day of fulfilling financial obligations to various parties. And you will be tasked to sign a stack of documents. The following section will show you the specific documents and items payable.
Documents for Signing
The buyer and the seller is expected to sign various forms. In here, you will learn what you will have to sign as a buyer as well as the documents to be signed by the lender.
For the Buyer:
• The promissory note or the mortgage note
• Deed Title
• The Truth in Lending document
• The Loan Form
• The Survey form
• Inspection Forms
• The RESPA or Real Estate Settlement Procedures Act form
• Form Stating the Purchase Price and Its source
For the Seller:
• Property deeds
• Bill of sale
• Affidavit of title
• Warranty Deed
• The Certificate of Occupancy
• Real Estate Settlement Procedures Act Form
• Form Stating the Purchase Price and Its source
The Cost Involved in Closing
The home buying process is never final without paying its immediate expenses. Aside from the down payment, several other costs are incurred from the various services required in home buying.
The payment part would usually require escrow services. This is a secured type of payment wherein a third party, will take receive all payments that was charged to the seller and the buyer. After then when all money is in, the escrow agent will give the appropriate payment to the parties involved.
Examples of Closing Costs are:
1. Lender’s Fee includes the administrative fee, application fee, commitment fee, loan origination fee, discount points and fees involved in examining the documents.
2. Third party’s fees includes the commissions, appraisal fee, attorney and settlement fees, fee for credit report, certifications, inspections, cost of mailing, insurance titles, search fees and surveys fees.
3. Government Fees include fees for recording new deeds, state taxes and county taxes.
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