Mortgage Loan Closing
Mortgage loan closing is the last phase of the homebuying experience. There are several important aspects to the mortgage closing process ― including closing costs, key documents and paperwork, title searches, and escrow accounts. Whether you are a first-time home buyer, a seller, or an experienced real-estate investor (in residential or commercial properties), understanding the mortgage loan closing process will help you take that final step towards homeownership.
During a formal mortgage closing, the buyer and seller (with their respective real estate agents and attorneys) are present at a pre-determined location, date and time. These days, however, it’s not necessary to literally sit at the table across from the “contra-party” on closing day. The documents required to complete the mortgage closing can be delivered by Express Mail or e-mail ― to be signed, scanned or copied, and returned to the other party’s agent for presentation.
As a major part of the mortgage closing process, the buyer must obtain homeowner’s insurance. Most homeowner’s insurance policies cover the house, including adjoining structures and the contents of the home. It is very important for homebuyers to review and understand the terms, conditions, and exclusions (what the policy will not cover) of their homeowner’s insurance before purchase. Because homeowner’s insurance policies can vary by issuer, state, and specific area (e.g., regions prone to floods, tornadoes, earthquakes, or other natural disasters), this step in the mortgage closing process should be researched with great care.
On loan closing day, the buyer and the lending institution must present their payments, and all contracts and documents are executed by the buyer and seller. The settlement attorney will then proceed to file all the necessary papers with the court to transfer ownership, and the mortgage closing process is complete.