Closing on a home means you are about to plunge into a new life as a homeowner.
Several people gather to facilitate the buyers and sellers at real estate closings.
This can automatically put home-buyers in an stressful situation.
For the homeowner-to-be, signing the final papers resonates with an almost ritual sense of deep financial and legal responsibility. That’s why we believe in preparing home-buyers what to expect at closing.
Most buyers know they will face multiple legal signatures. We know you are aware there will be an ever-heightening stack of documents on that quiet conference table. The ritual of the closing meeting and all the formal signatures might be enough to cause even the calmest client to become a little nervous.
Meet the Champions of Stress-Free Closings at Principal Law
That’s why we at Principal Law are champions of the stress-free home closing meetings. Since this is the day you will close the deal on one of the most expensive purchases of your life, we want all the details to fall into place as smoothly as possible.
Therefore, we open the educational topic of closings. This blog is the first of a series of blogs on finalizing the deal on your new home. So, Principal Law wants you to know what to expect leading up to and into those significant moments before you get your official house keys.
Closing Tip Number One: Rev Up Your Endurance, Education and Patience
On the day of your house closing, we hope you have indulged in a good night’s rest and a healthy meal.
You’ll make many signatures at your closing, but you’ll earn your house keys.
Your meeting to close on your house might last as long as 2 hours of steady concentration.
Be Prepared for these effects:
So, you will be suffering a bit of writer’s cramp because you will be signing multiple documents.
Plus, we must confess, you might endure a modicum of breathless tedium you await the signatures of the other parties involved.
In the days before the signing and during the actual closing appointment, we will inform you about the documents you are signing. You see, we don’t believe in allowing buyers to blindly sign documents they do not understand. We know that a knowledgeable buyer is far less stressed than a buyer who does not understand what is happening in the meeting.
And stress reduction is essential for all parties. By reading this blog you are taking a preliminary step to prepare for the mysterious and formal appointment to close your deal for the ownership of your home.
Closing Tip Number Two-Know Your Cast of Characters
We do not want you to be intimidated by the cast of characters who will show up at the meeting to close on your new home. It reduces stress
As you sign countless papers at the closing, remember they complete the dream of your new home.
to know the a little bit about the roles of the people you will be meeting at the conference table. They are a certain cast of characters from the world of real estate, finance and law. But, remember you and the seller are the stars of the show. And they are all there to help you seal a deal.
(Note: We are talking about a face to face closing, in this situation. However, the other type of major home real estate closing is termed a “mail-away,” and it has its own special rules.)
- You’ll meet the Closing Agent, who might work for the lender or the title company.
- There will be lawyers present. Although not required, you can have your Real Estate Attorney there. Perhaps the lender’s attorney will arrive also. Your representing attorney could even be present, performing double duty as the closing agent.
- You will see The Title company representative, who provides written evidence of the ownership of the property.
- The Home seller,
- The Seller’s real estate agent,
- You must count yourself. You are the buyer, also known as the mortgagor.
- The lender, also known as the mortgagee.
Closing Tip Number Three: Stay Cool By Knowing What To Expect
Even if you are facing these people in the intimidating atmosphere of a formal glass and chrome conference room or chic beachy decor, be aware that Principal Law has helped you come this far. And at closing you have nothing to fear. We won’t allow anyone to rush you into signing papers full of tiny print and traps.
We believe your fears will melt and you can stay calm and focused if you know what is going to happen in your Closing. You have only two crystal clear jobs in this scenario for the approximate 2 hours the appointment will consume:
Your Home Buyer’s Job A at Closing: Signing Legal Documents
You will be putting your legal signature on an agreement between you and your lender. It will list your terms and conditions of the mortgage. Also, you will need to sign an agreement between you and the seller of the property. That document transfers the ownership of
Portrait of a happy family saving money for closing costs on the new house.
your home to you. Principal Law advises you to read everything carefully and we caution you about signing forms if they have large blank spaces or lines. Who knows what someone could write above your signature in that vast blank space?
Your Home Buyer’s Job B at Closing: Paying the Money
You will be paying closing costs and escrow items. Experts say, “There are numerous fees associated with getting a mortgage and transferring property ownership. On the one hand, the borrower typically pays these fees with a check at closing.” On the other hand, “Some fees can be added to the loan balance, or the borrower can pay a higher interest rate and have the lender pay the fees.” Historically, you pay with a cashier’s check. However, under Florida law today, the big money in this scene is more often handled as wire transactions than as a cashier’s check.
About the Closing Agent: The Man or Woman Who Keeps all the Paperwork Flowing
While you are focused on your signing activity, you will notice the closing agent from the cast list above. He conducts the meeting like your host for the day. He or she assures the group that everyone has signed their documents. Plus they take the responsibility of legally recording those papers after the meeting.
Rest assured she will also make certain that you or you and the seller pay your closing fees and escrow payments.
Closing Tip Number Four: Get Ready to Understand the Closing-Day Documents
Principal Law reminds you that the essential closing documents changed in 2015. Thus, if you have bought a home previously, you still might not recognize some of the papers you will see in 2018. We’re happy to note that the Know Before You Owe mortgage rule reduced some of the paperwork behind closing a loan.
In fact, the new laws replaced 4 confusing documents with two brand new streamlined documents, and you can find out more about them at this reliable online resource.
Closing Tip Number Four: Anticipate the Familiar “Closing Disclosure,” a Document of Major Significance
Within the document named the Closing Disclosure, you will find listings of the actual fees, costs and credits associated with completing your loan. You will recognize this paper. Why? …Because the lender gave you a copy three days prior to your closing meeting.
And there’s a very, very important reason you had it that long. You need to take some time to study the deal. Everyone concerned wants you to have time to look at the details. As you look at this paper, you can now compare the loan terms and costs with those expressed in your Loan Estimate. (And note that there had better not be much difference in costs between the two.)
Closing Tip Number 5: Breathe Deep While Reading and Signing the Promissory Note
Perhaps this is one of the documents that gives the closing meeting such a scary reputation. The document explains not only the details of the loan but what happens if you fail to make your payments.
Absorb the due dates for payments. Note where you should send them. Likewise, read the detailed explanation of the legal actions lenders can take if you fail to make your payments on time. This is a very serious sheet of paper. When you sign it, you have promised to repay the loan in the manner specified.
Closing Tip Number 6: Have a Nice Drink of Cold Water As You Tackle the Deed of Trust
As a borrower, you will have certain rights, but also you will have responsibilities. This form explains both. As you sign it, your attorney at Principal Law wants you to realize exactly what you are doing.
In essence, you are giving the lender the legal right to take back the property through foreclosure if you cannot make the payments as agreed.
Closing Tip Number 7: Discover the Deed
Now you know when you see the Deed, you have almost completed your closing meeting. We know of a buyer who said signing this document was like completing medical school and getting married on the same day. He got a little dizzy and breathless, but he did fine that day and in the many days, payments and children that followed. The Deed means you are a documented, bona fide homeowner.
Using this legal document, the seller is transferring legal ownership of the house to you.
Principal Law prepares you to know you that you do not take this document with you when you leave the closing. You will only obtain a copy. It remains with a third-party trustee who will hold it until you have paid it completely.
The original of the deed is not really yours, not until you have paid for the house.
Closing Tip Number 8: Plan a Celebratory Lunch or Dinner after this last step -Validating Your
Happy Couple Earns the Keys to their new Home
Affidavits and Declarations
These documents legally declare and testify that you providing true information. One such paper states that you will be using the property as your primary residence. Another important document will be that you verify the seller made all the requested and appropriate repairs to the property before the closing meeting. In our next blog, we will give you the details on other affidavits and declarations. For now, just realize they exist: Proration papers, Statement of Information, Declaration of Reports, Abstract of Title.
The Take-Away from these Tips
This was simply a brief outline of the highlights of your Closing meeting. Stay with Principal Law’s Blog series on the closing as we go into the details behind some of the legal mysteries that confuse many home buyers.
For example, in future posts, we’ll be informing you about the facts behind title policy premiums in Florida.
Eventually, you will undoubtedly want more details about the contents of a closing disclosure before you get yours. And we promise to bring you more specifics about the documents in the Affidavits and Declarations step of the closing meeting.
Likewise, we will soon explain the meaning of a title search and the tremendous value of a clean title. These are details that were researched days or even weeks prior to the closing, but they lead up to a smooth, stress-free home closing meeting.
