What to Expect When Closing on a House

Congratulations, you are closing on your new home this week! While closing on a house may be the last chapter in your home buying journey, it is important to take time to make sure everything is in place to ensure a smooth, trouble-free closing process.

How long does closing on a house take exactly? The closing process itself is officially completed in one day. However, several steps must be taken between the day your offer is accepted and the day you are officially a homeowner. Read on to learn what to expect the week of closing so that the process runs smoothly.

Make Sure Your Closing Contingencies Are Complete

At this point, you should have completed all major tasks and prepared for closing contingencies—after all, these need to be taken care of for the contract to become legally binding. This includes a full home inspection, an appraisal and a final walkthrough. You will also need to finalize your insurance and loan documents.

Typically, the final walkthrough will take place within 24 hours of your closing date. Bring your contract to the final walkthrough to make sure the current state of the home exactly matches the originally agreedupon state.

During the walkthrough, be sure to test and double-check everything. If you see any last-minute damages, your bank may not approve your loan until those are taken care of. You could also ask the seller for a credit if the damages cannot be settled before closing.

Have Your Financials in Order

Once you receive your closing disclosure, you will typically have three days to review everything before you sign your final closing paperwork. This form provides final details about the mortgage loan you have chosen and your closing costs. Review each cost very carefully—this will also give you an idea of how much you can expect to pay during closing.

Note that you probably will not know the exact amount you will be paying until you are actually in the process of closing on your house. It is good to budget a large buffer and bring your personal checkbook in case any unexpected costs come up.

Make sure everything is in place to ensure a smooth processing of your down payment. If there is any chance your bank may delay the payment, bring your down payment to closing in the form of a cashier’s or certified check.

According to Realtor Mag, about 46% of delays experienced when closing on a house  are caused by financing issues. The most common issue? Buyers taking on too much credit before their closing date. This is why it is extremely important to avoid making any large purchases in the days prior to closing on your house. Your lender will also do last-minute credit checks, so significant changes can put your loan at stake.

Lastly, be sure to have all your documentation to make sure the final approval on your loan is successful. Make a checklist of all the documents you will need, including:

• Identification
• Income statements (pay stubs, W2 forms)
• Asset statements (bank accounts, investments)
• Insurance information
• Copy of contract
• Divorce decree, child support/alimony information, bankruptcy papers (if applicable)

Preparing for Closing Day

You have officially made it to closing day! There are only a few more steps you need to take until your new home is ready for move-in.

What to Bring

Your title company representative and mortgage loan officer should provide you with a detailed checklist of everything you will need to bring to closing. Here are a few essential items you do not want to forget: 

• I.D.
• Any outstanding documents/paperwork for the title company or mortgage loan officer.
• Your certified or cashier’s check made payable to the title or closing company.
• Your personal checkbook, in case any last-minute changes or items that are not included in the settlement come up.
• Home inspection reports.
• Bidding negotiations and all documents related to the asking price.

What Happens at Closing

Closing on a house is a long and detailed process, so be prepared to spend as long as a couple of hours completing the process. You will need to sign at least 50 to 100 pages of documentation. While it might be tempting to skim through them, it is important to carefully read through each page, as these are binding legal agreements.

The people involved in your appointment may vary, and oftentimes sellers take care of their paperwork separately ahead of time, but you should expect most of the following people to be present at closing:

• The escrow/closing agent
• The attorney
• A title company representative
• A mortgage lender
• Real estate agents

After you pay your remaining closing costs and review the seller’s signed property transfer documents (if they’re not present at closing), you will sign a settlement statement, mortgage note (legally stating your promise to repay the loan) and mortgage or deed of trust. The title company will then register the new deed in your name.

The process of closing on your home is not a lightning-fast process, but each little signature is all worth it when you are able to step into your new home!

Closing on a house means that you are one step closer to home ownership. Are you ready to start the journey of looking for your new home? Explore and compare Perry Homes’ move-in ready properties to find your dream home today!