Buying a home is a complicated legal transaction. For most people, it’s the biggest transaction they’ll make in a lifetime.
Once the contract has been signed, gotten a home inspection, a termite inspection, and met other contractual requirements, it’s time for your real estate closing.
So, what do you need to know about closing on your home? We’ve got 9 of the most common questions right here.
Once the contract has been signed, gotten a home inspection, a termite inspection, and met other contractual requirements, it’s time for your real estate closing.
So, what do you need to know about closing on your home? We’ve got 9 of the most common questions right here.
Who Decides Who Will Handle My Closing?
As the purchaser or refinancer, you have the choice of deciding who will close on your property, a closing agent or an attorney.
What are the Services a Closing Agent Provides?
Typically, your closing agent will receive a “title order” from a loan officer, real estate agent, refinancing owner or purchaser to prepare for closing.
The closing agent will then order a title search, if required, also a location survey, real estate tax information, and payoff statements. A closing agent then schedules a settlement date for both parties.
The day before or the day of closing, the lender will provide final loan instructions to your closing agent, including lender documentation.
Your closing agent will then prepare the final HUD-1 Settlement Statement. If any adjustments need to be made to the HUD-1, closing could be delayed.
Otherwise, the lender will remit funds to the closing agent’s escrow account for disbursement.
The closing agent will then order a title search, if required, also a location survey, real estate tax information, and payoff statements. A closing agent then schedules a settlement date for both parties.
The day before or the day of closing, the lender will provide final loan instructions to your closing agent, including lender documentation.
Your closing agent will then prepare the final HUD-1 Settlement Statement. If any adjustments need to be made to the HUD-1, closing could be delayed.
Otherwise, the lender will remit funds to the closing agent’s escrow account for disbursement.
What Fees Do I Pay the Closing Agent?
There are two kinds of fees for the closing agent, variable and non-variable. Both will vary widely among closing agents and attorneys. For variable fees and costs expect to see items such as:
Non-variable costs include the transfer and recordation taxes charged by the State of Virginia, costs charged by the county/city clerk for recording the deed, the mortgage (deed of trust) and other documents which require legal recording.
Generally, unless otherwise stated in the sales contract, the purchaser and seller split the total transfer and recording fees.
Title insurance for the new homeowner can be purchased at this time as well.
- Settlement/Closing Fee
- Title Search/Abstract Fee
- Title Insurance Premium
- Title Insurance Binder Fee
- Location Survey Fee
- Courier/Overnight Fee
- Notary Fee
- Document Preparation fee
Non-variable costs include the transfer and recordation taxes charged by the State of Virginia, costs charged by the county/city clerk for recording the deed, the mortgage (deed of trust) and other documents which require legal recording.
Generally, unless otherwise stated in the sales contract, the purchaser and seller split the total transfer and recording fees.
Title insurance for the new homeowner can be purchased at this time as well.
Do I Really Need Title Insurance?
In Virginia, homeowners title insurance is optional. However, lenders require the purchaser to buy title insurance to protect the lender.
It just makes good sense for you to buy homeowner’s title insurance to protect the largest investment of your life.
It just makes good sense for you to buy homeowner’s title insurance to protect the largest investment of your life.
What’s the Difference Between an Owner’s and a Lender’s Policy?
A lender’s title insurance policy provides no protection for the buyer. It only protects the lender. If there is a fault in the title that results in a financial loss, the lender will be paid back.
Buyers often think that if lender’s title insurance is listed on the closing form, they are protected, but they aren’t.
It’s up to the buyer to purchase their own title insurance. We strongly recommend that buyers make the one-time purchase of homeowner title insurance. It protects the purchaser in the event that the property title—proof of ownership—is flawed.
Such flaws can include easements, inaccurate notary acknowledgments and deeds, wills, or trusts that have the wrong names or improper vestings, outstanding mortgages or liens.
Buyers often think that if lender’s title insurance is listed on the closing form, they are protected, but they aren’t.
It’s up to the buyer to purchase their own title insurance. We strongly recommend that buyers make the one-time purchase of homeowner title insurance. It protects the purchaser in the event that the property title—proof of ownership—is flawed.
Such flaws can include easements, inaccurate notary acknowledgments and deeds, wills, or trusts that have the wrong names or improper vestings, outstanding mortgages or liens.
What are Some Examples of Homeowner Title Insurance Protection?
Both buyer and seller have closing documents to sign. Today, neither must be present on the same day to sign documents.
And while it might feel like you’re wading through a pile of paperwork on closing day, it’s important to understand that the closing documents contain information and conditions that determine closing costs and your mortgage.
For buyers, these are typically the standard documents you will sign:
There’s a lot to buying a home and your real estate closing is the final piece that allows you to legally take ownership of your new home.
Plan carefully and lean heavily on your real estate agent for guidance. And when you’re ready to close, consider Lilly Title & Settlement. We’re a woman-owned business in Staunton, VA, but we close on properties far outside of our historic town.
Get the attention to detail, the accuracy, and the experience you want to close your home quickly! Call ustoday.
And while it might feel like you’re wading through a pile of paperwork on closing day, it’s important to understand that the closing documents contain information and conditions that determine closing costs and your mortgage.
For buyers, these are typically the standard documents you will sign:
- A Closing Disclosure—States the costs of the mortgage, including your loan amount, interest rate, monthly mortgage estimate and closing costs.
- Proof of Homeowners Insurance—Lenders require this to reduce their financial risk. The policy must meet your lender’s minimum requirements to close.
- Loan Application—Your lender will give you a copy of your loan application to review at closing. Read over it to make sure it’s accurate!
- Mortgage Note—Also called a promissory note, a mortgage note is a contract of repayment for the amount agreed upon by the lender and buyer. It shows the amount you are borrowing, the interest rate, any prepayment penalties, monthly mortgage amount, and length of your legal commitment. Review carefully!
- Escrow Account: Statements and Documentation—Buyers are required to sign the escrow statement as part of closing. This document lists how much of your monthly payment will cover property taxes, mortgage insurance and homeowner premiums.
- Deed—This document transfers ownership from the current seller to the new buyer. The seller, also called the grantor, must get the deed notarized for it to be valid at closing.
- Title--This is really more of a concept, not a document. Title defines ownership rights over your home. Holding title is essential and the deed is an indispensable document that gives you ownership rights over your new home.
There’s a lot to buying a home and your real estate closing is the final piece that allows you to legally take ownership of your new home.
Plan carefully and lean heavily on your real estate agent for guidance. And when you’re ready to close, consider Lilly Title & Settlement. We’re a woman-owned business in Staunton, VA, but we close on properties far outside of our historic town.
Get the attention to detail, the accuracy, and the experience you want to close your home quickly! Call ustoday.
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