Home Closing and Settlement
What You Need to Know About Closing
Quick guide on what you need to be ready for closing. Complete a final walk through as based on your prior home inspection and prepare for the closing date.
Completing a Final Walk Through
Before closing on your home, it is advisable to complete a final walk through the home.
Review the inspection points. Ensure that everything noted on the inspection report have been completed as specified.
Make one more visual inspection as you complete your final walk through:
- run the appliances to see if they operate properly
- run the air conditioning and test for broken window seals
- investigate any bad floor spots
- check the walls for damage
- check the wall's and ceiling's paint/wall paper
- inspect the attic
- eye under the outside eaves for proper installation
- investigate potential drainage problems
- check the driveway and sidewalk for damage
Any problems that were previously discovered and have not been corrected as specified in the inspection reports must be noted prior to closing. It is the contractor's responsibility to fix them.
Home Inspection Checklist
The Inspection will assess the quality and condition of the following areas:
|The Roof, Attic and Related Features:||The Plumbing System:|
|roofing type and materials, flashing and joint material, insulation, gutters and down spouts, ventilation, skylights, vents, turbines or fans, chimney, any leakage.||supply lines and pipes, water pressure and drainage flow, fixtures and faucets, hot water heater, tubs, sinks, toilets, showers, whirlpool, laundry appliances, waste disposal.|
|HVAC/Fireplace:||The Electrical System:|
|heating type and condition, furnace, heat pump, duck work, registers and grills, fireplace flues.||exterior service and meters, fuse and breaker panels, capacity, grounding, wiring, switches and outlets, electrical fixtures, any potential hazards.|
|Air Conditioning:||Kitchen Appliances:|
|equipment type, ductwork, filters.||dishwasher, range burners, oven elements, grills, vents, microwave, garbage disposal, trash compactor.|
and Exterior Structures:
|foundation type and construction, settlement, water penetration, exterior walls, potential termite or rot damage, windows, doors, porches, garage, decks, swimming pools and pumps.||dunstable soil, drainage, fences, grading, retaining walls, payments and driveways.|
|Download the Housing Inspection report from Freddie Mac as a guide: click here|
|Other Important Inspection Tests:||Completing a Final Walk Through:|
tests required by law or your vendor may
include environmental and termite inspections.
Termite Control Information:
Find pest control contractors:
Search Yellow Pages for:
Notes: Home Closing Information
The following information was obtained from the Federal
Consumer Information Center
Buying Your Home: Settlement Costs and Helpful Information
Closing costs are usually associated at the time of taking possession of your home. These include:
- Attorney's or escrow fees (yours and your lender's if applicable)
- Property taxes (to cover tax period to date)
- Interest (paid from date of closing to 30 days before first monthly payment)
- Loan origination fee (covers lender's administrative costs)
- Recording fees
- Survey fee
- First premium of mortgage insurance (if applicable)
- Title insurance (yours and your lender's)
- Loan discount points
- First payment to escrow account for future real estate taxes and insurance
- Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)
- Any documentation preparation fees
What happens on closing day?
- You will need to present proof or receipt that you have paid for your homeowner's insurance policy for the new home.
- The closing agent (or attorney) will list the money you owe the seller (remainder of down payment, prepaid taxes, etc.)
- The closing agent (or attorney) will then list the money the seller owes you (unpaid taxes and prepaid rent, if applicable).
- The seller will provide proofs of any inspection, warranties, etc.
- You will sign the mortgage agreement and mortgage note, agreeing to the lending and repayment provisions. You will also agree that if you fail to make payments, the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses.
- The seller will give you the title to the house in the form of a signed deed.
- You will pay the lender's agent closing costs. The agent will then provide you a settlement statement listing by line item those costs that you have paid.
- The deed and mortgage will then be recorded in the state Registry of Deeds listing you as the new homeowner. You will then take possession of the home.
What do you get at closing?
- Settlement Statement, HUD-1 Form (itemized list of all related closing costs, this form must be completed and given to you at or before closing)
- Truth-in-Lending Statement
- Mortgage Note
- Mortgage or Deed of Trust
- Binding Sales Contract (prepared by the seller; your lawyer should review it)
- Keys to your new home
Get Ready for Closing
The following information was obtained
from the Federal Consumer Information Center
Buying Your Home: Settlement Costs and Helpful Information
Selecting an Attorney:
- Before signing any closing documentation, you should
have an attorney review the documents and closing
instructions to ensure that your interests are protected.
In some parts of the country, the attorney may act
as settlement/closing agents, representing the buyer,
seller, lender, and others in the closing settlement.
- Your real estate agent can assist you on selecting
an attorney. Or you can shop around. Make sure the
attorney is experienced in closing settlements.
for attorney search -- from lawyers.com
- Some questions to ask when selecting your attorney:
- What is the attorney's charge for negotiating the agreement of sale, reviewing documents and giving advice concerning those documents, for being present at the settlement, or for reviewing instructions to the escrow agent or company?
- Will the attorney represent anyone other than you in the transaction?
- Will the attorney be paid by anyone other than you in the transaction?
Selecting a Settlement Agent:
- Settlement practices vary from locality to locality, and even within the same county or city. Settlements may be conducted by lenders, title insurance companies, escrow companies, real estate brokers or attorneys for the buyer or seller.
- Your real estate agent can help secure settlement services. Or if you are on your own, shop around for a settlement agent, which could be your attorney.
- In some parts of the country (particularly western states), settlement may be conducted by an escrow agent. The parties sign an escrow agreement which requires them to provide certain documents and funds to the agent.
Securing Title Services:
- Title insurance is usually required by the lender to protect the lender against loss resulting from claims by others against your new home.
- In some states, attorneys offer title insurance as part of their services in examining title and providing a title opinion. The attorney's fee may include the title insurance premium. In other states, a title insurance company or title agent directly provides the title insurance.
- The title insurance policy does not protect you. If you want to protect yourself from claims by others against your new home, you will need an owner's policy.
- Under RESPA, the seller may not require you, as a condition of the sale, to purchase title insurance from any particular title company. Generally, your lender will require title insurance from a company that is acceptable to it.
- The title insurance company will issue a "Commitment to Insure" or preliminary report or "binder" containing a summary of any defects in title which have been identified by the title search, as well as any exceptions from the title insurance policys coverage.
- The commitment is usually sent to the lender for use until the title insurance policy is issued at or after the settlement. You can arrange to have a copy sent to you (or to your attorney) so that you can object if there are matters affecting the title which you did not agree to accept when you signed the agreement of sale.
- If you are buying a newly constructed home, make certain your title insurance covers claims by contractors. These claims are known as "mechanics liens" in some parts of the country.
- Lenders or title insurance companies often require a survey to mark the boundaries of the property. A survey is a drawing of the property showing the perimeter boundaries and marking the location of the house and other improvements.
Home Buying Steps
|How Long to Payoff Your Loan|