This section discusses the various activities that must happen before you can close on your loan, helps you calculate closing expenses, and tells you what will happen at the closing meeting , including what types of documents you can expect to receive.
The mortgage loan closing (or settlement ) is the meeting at which you take official ownership of the house. You'll be required to sign many papers and pay your closing costs at the meeting in order to take possession of your new home. Technically, two separate closings occur at this time: the closing of your loan and the closing of the sale. Then, at the end of the meeting, you get the keys to your new home!
Although the closing process varies from state to state, and even within the same county or city, certain activities are standard. It is to your benefit to understand the many activities that need to occur before, during, and after the closing meeting and their costs.
No later than three business days after your loan application was received, your lender should have delivered or mailed to you a " good faith estimate " of the total charges due at closing and a copy of the government publication Settlement Costs: A HUD Guide. Then, one business day before the closing meeting, your closing agent must allow you to review a copy of your two-page settlement form — called the HUD-1 Settlement Statement .
The good-faith-estimate is based on the lender's typical loan origination costs for the area where your home is located. So the estimate usually changes between application and closing. That is why you'll want to review your settlement form before the closing meeting. It will show you the actual amount of money you'll need to bring to closing. Remember that you'll need to pay your closing costs in the form of a certified or cashier's check. Personal checks usually aren't accepted.
Closing costs vary widely depending on price, location, and other factors. Overall, you can expect your closing costs to amount to between 3 percent and 6 percent of the sales price.
The Closing Table Page 2
