You've made it through all the credit checks, submitted all the information the underwriter needed, got your home insurance taken care of, and the home inspector put their stamp of approval on the deal and now it's time to close on your new house or investment property. Being a real estate investor, I've closed on many deals. Some deals went smoothly and some took some effort.
From the first moment you talked to the mortgage broker you've been waiting for this day. Typically, the title company will have a traveling notary that will come to your home or place of business to have you sign the papers. When that person shows up they'll need a couple things. One is a certified photo identification card, usually your drivers license. They'll also need your spouses card because they'll need to sign the papers too. They usually take a snapshot of your license with a polaroid camera. Then you'll need to give them a cashier's check with the amount specified by the title company. This money is to compensate for any downpayment you may have made minus the earnest money you already put down. For investors, this is usually 10 percent of the loan, for regular home buyers it can be much less. If you are a seller, typically the escrow agent will send you a check or have your money deposited into an account of your choosing when the deal files at the courthouse.
The notary will go over each page of the closing packet with you. Pay special attention to the HUD settlement statement. It has an explanation of all the costs of your loan and how it was calculated, including loan fees. If possible, you can ask the mortgage broker for a trial statement to see where you are with fees before closing. They have a way of increasing, if you don't act like you know what you're doing. Be vigilant, ask questions. Don't be afraid to get the agent or loan officer on the phone during closing if you're not sure. In this market, where buyers are more scarce, don't be afraid to ask for a reduction in fees or even for the seller to pay your fees. As a buyer, you hold all the cards, without your money nothing happens.
Here's an interesting thing to check. After you close, you think the house is yours, right? There's one more thing you have to make sure of. When the packet is sent off, it usually is overnighted to the county courthouse. Sometimes the package gets lost and the deed isn't transferred. It is extremely important that you make sure the deed has been transferred into your name. Your agent will give you the keys when the house closes, but you should always check the county's website. It's a live file. This means it's updated in real time. Many of the other online services like Realist are updated sporadically. It's important to check as soon as possible because the trail will grow cold and no one will remember if they saw the documents or not.
Rick Johnston is a real estate investor and owner of http://www.arecreditreportsfree.com Stop by to learn more about HUD Settlement Statements.
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