What to Expect at Closing Table When Getting a Mortgage
"Clear to close."
These are the three most anticipated words in the mortgage industry. When underwriting utters that magic phrase loan officer and borrowers heave a deep sigh of relief. The deal is done, no more paperwork, no more invasive questions, no more spending your evenings struggling to find obscure documentation and, most importantly, no more being a renter.
Then the enormity of the situation sinks in. You're about to write a big check and commit to a home. Quite possibly, for some, a 30-year commitment. But wait, the deed is not done. The deal has not been officially consummated, not yet at least. You have to grab your blue pen and get ready to sign and sign on the dotted line. You, in all likelihood, also need to bring a sizable cashier’s check with your cash to close funds.
Getting to the Closing Table
Before we discuss the finality of signing your closing package, let’s discuss how you got there. We’ll take it from your initial loan approval.
Your closing date is rapidly approaching and underwriting is still requesting seemingly random documentation.
Your primary job during the time your loan is still in underwriting is singular. Move as quickly as possible to honor document requests, answer questions and do anything else that is needed to get you to the closing table. No matter how ridiculous you think the doc request may be, set that hoop aflame and jump yourself through it as quickly as possible.
Do not take the inquisition personally, that is what underwriting does. Handle the last few items and submit them back to underwriting so that you can hear the three best words in real estate - clear to close!
You are DONE. Only a few routine hoops to jump through. Cutting your down payment check, signing on the dotted line and getting ready to move. Right?
Your Down Payment and Cash-to-Close
You have seen a blizzard of mortgage disclosure documents since you started the closing process. Initial disclosures, redisclosures, more redisclosures and possibly even another set of redisclosures.
The sheer volume of paper can easily make first-time buyers dizzy. Confused and dizzy.
But we need you to splash some water on your face and look alive. Around 3 days before closing you will receive your final mortgage numbers.
Closing costs, escrow amounts, interest rates and cash to close are all part of the package. Do they match the numbers on the original disclosures? If not why?
It is not uncommon for property taxes and homeowner's insurance to be misquoted on the Good Faith Estimate. A lot of the time by no fault of your loan officer. Of course, it can also be intentionally misquoted, but we know you chose your loan officer more carefully than that.
Regardless, underestimating escrow amounts can balloon your cash to close and your estimated mortgage payment. This is definitely something to track throughout the application approval process.
Signing Your Closing Documents
The docs you sign at the closing table should mirror your final set of mortgage disclosures (and should be fairly similar to your original set of disclosures too).
Blue pen in hand, expect to sign at least 50 pages of documents with your legal name, the one that should have also been on your loan application.
Once the closing docs are signed by both you and the seller they will be faxed/scanned to your mortgage lender's closing department. In some cases, these docs are required prior to funding your loan and paying the seller. In other cases, the funds have already been wired and are waiting with the closing docs.
Once the documents are signed and the loan is funded you are officially a homeowner, congratulations!