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The Closing Process for First-Time Home Buyers

May 7, 2012

The Closing Process for First-Time Home Buyers

The home buyer tips collected below pertain to the closing process. Depending on where you live in the United States, this process might be referred to as “closing” or “settlement.” Either way, it’s the final step in the home-buying process. This is when all of the paperwork is finalized and all of the funds are distributed. The seller receives a check for any proceeds they made from the sale. The buyer presents a cashiers check for whatever closing costs they have incurred. Ownership of the property is transferred from the seller to the buyer. In short, this is when you become a homeowner. Here are some tips to help you navigate this process.

Closing / settlement tips for first-time home buyers:

Review the closing / settlement procedures for your state. You want to be familiar with the sequence of events that will take place leading up to, and including, your closing date. Ask your agent about it. Do some research online.

You can expect to receive a HUD-1 settlement statement a couple of days before closing. This document will list the actual amount you have to pay on closing day. Your mortgage lender will give you an estimate of closing costs at the time you apply for a loan. But your actual closing costs may be more or less than the estimated amount. The HUD-1 statement gives you the finalized amount that will be due. Make sure you review this document carefully. Here’s a sample statement (PDF file).

Be prepared to bring a cashiers check with you to the closing / settlement process. You may also be able to wire the funds to the escrow company, via electronic transfer. This is something you should ask about in advance. The escrow company can tell you what form of payment they will accept.

At this stage in the process, there are three people you should keep in touch with. These are your agent, your loan officer, and the settlement / escrow agent. Be proactive about contacting these people. You want to make sure that everything is on track leading up to your closing date.
Don’t be surprised if the closing date gets bumped by a day or more. And don’t panic if it does. Over the last few years, there have been a lot of changes regarding closing documents and procedures. So it’s fairly common to encounter snags and paperwork delays at closing time. As long as it doesn’t wreck the deal entirely, you will still be okay. A closing delay is an inconvenience, but nothing more.

Take your time reviewing and signing documents at the closing. This is a cliché that you’ve probably heard before. But it’s very important. Many first-time home buyers feel rushed during this process. They feel like they’re holding the entire process up by examining the documents closely. You should never feel this way. Take as long as you need. Do not sign anything unless you fully understand the information it contains. This is your process. A good escrow / settlement agent will go over each document with you to ensure you understand them.
Conclusion, and Where to Learn More

This tutorial offers tips and advice for first-time home buyers in 2012. Despite its length, it really only scratches the surface of the home-buying process. Elsewhere on this website, you will find more than 500 articles relating to this process. We have a variety of in-depth tutorials about mortgage loans, credit scores, house hunting and more. You can use the search tool located at the top of this website to access our library.

SOURCE:

Read more: http://www.homebuyinginstitute.com/mortgage/first-time-buyers-167/#ixzz1tekhIBWT

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