by Gilly Brewster
(Rawlins, Wyoming, USA)
You have been through the process of getting approved for a mortgage and you’ve found a home and the seller has agreed to accept your offer. You have had the home inspected and everything is in good repair. It has been a long and difficult process but you are almost done.
All that is left is the final paperwork. Here are some tips to make sure your real estate closing goes smoothly.
Tip Number 1: Close near the end of the month.
For most of the time you will be paying your mortgage, each payment will include the interest due for the previous month. When your purchase is finalized in the middle of a month, your lender will require you to pre-pay the interest on your mortgage through the end of the month. This is because they want your payment to be due on the first of every month from then on.
Tip Number 2: Insist on receiving a copy of your HUD-1 closing statement at least 24 hours before your closing.
The law actually requires this, but in real life loans sometimes get approved very late in the process, or the lender and closing attorney or title agent are very busy that day and running late preparing the closing documents. This often results in the closing statement being prepared just before the scheduled closing time.
Closings which should last a few minutes can stretch out for hours when this happens. In addition, lenders do not wire the funds for the closing to the attorney’s escrow account until they have reviewed the closing statement for accuracy. Push your lender to have the closing documents sent to the attorney’s office as early as possible.
Tip Number 3: Get copies of the standard loan documents ahead of time so you can review the fine print.
Most mortgage closings require substantially the same documentation. If your closing package is not at the attorney yet, the lender can still provide you with copies of most of what you will be signing. The attorney or title agent should still explain it to you at the closing, but reviewing the documents ahead of time will make your closing much less stressful.
Tip Number 4: Be sure to get the utility transfer information and homeowners association contact details before you go to closing.
Even though the seller may be remaining in the home for a few days, go ahead and make your utility arrangements before the closing. Making these arrangements ahead of time will help you avoid being surprised at closing by large utility deposit requirements or delays transferring the account.
Tip Number 5: Take a good calculator to the closing.
Even though you will have reviewed the HUD-1 closing statement the day before, sometimes things still change on closing day. Be prepared to double check the figures and make sure you understand exactly where all the money from the closing is going.
A real estate closing should take less than an hour if everyone is properly prepared. When everything is thrown together at the last moment, a real estate closing can turn into a several hour long nightmare that ends with no money being transferred until the next day! Take your time and be careful of the details and your closing will be a breeze.