Mortgage Closing Process
Shopping for a home and a mortgage loan to finance the purchase may take months. Once the terms of the sale and the loan have been agreed upon, the mortgage approval process takes place. After the loan and all sale agreement contractual stipulations have been approved, the closing process may be conducted. Mortgage closings are scheduled by the lender at a time convenient for all parties involved.
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Pre-Closing
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The majority of the work happens prior to the mortgage closing process taking place. Before the time of closing, many transactions must occur. The potential buyer places an offer on the home and agrees to a purchase price with the seller. Then the loan application and approval process begins. At the same time, home inspections and any final documents required by the lender must be completed. When the seller and buyer have satisfied all of the lender's requests, the loan is approved and scheduled to close.
Features
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The closing process consists of document signing and an exchange of funds. The documents are generated by the lender or title insurance company. The bulk of these documents concern the contract terms between the buyer and the mortgage company. Other documents regard the seller of the property and the buyer. The documents are sent to a certified closing agent, who is a third party employee of the mortgage company or title insurance company. This person schedules the closing meeting with the buyers and tells them the total amount of funds that should be presented at the time.
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Process
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At the meeting, the closing agent presents the necessary paperwork to the buyers. The agent explains each document and what it means to them. The buyers must sign the documents in a certain way, as requested by the lender. In many cases, the closing agent also acts as the notary public to notarize the documents, if necessary. The buyers give the agent the funds, in a certified or bank check, and this portion of the mortgage closing process is over.
Post-Closing
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After meeting with the buyers, the closing agent returns the original documents to the lender or title insurance company. The documents are reviewed for errors by a post-closing agent, who ensures that everything is signed and notarized properly. If completed correctly, the mortgage loan can fund on the pre-determined date set by the lender. Certain documents, such as the mortgage and deed, will be sent to the county recorder's office where the property is located to be filed on record.
Considerations
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Home buyers should carefully review the documents presented to them at closing. The interest rate and terms of the loan are important details to inspect. If there are any errors, the lender must be contacted immediately. Primary mortgage loans offer a right to cancel clause, which is valid for three days after closing. If you wish to cancel the loan, the "right to cancel" document must be completed correctly. Additionally, the buyer may be responsible for paying closing costs and escrow fees. A check or money order made payable to the correct party will need to be sent back with the document to cancel.
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