STEP 6:
Closing on Your New House

Prepare for the final steps.
Closing is the final step in purchasing a home. At closing, the money you are borrowing from your lending institution is disbursed to the account of the seller, and the property is legally transferred to your name.
If you’ve done your homework and are satisfied that everything is in proper order, then it’s time to close on your loan. When you reach the settlement table, here are some of the standard documents you’ll see:

• HUD-1 Settlement Statement: This closing statement is an overview of all the money related to the transaction and how it is disbursed. The buyer’s side of the closing statement shows the price of the home, costs of obtaining the loan, loan amount, setting up the escrow accounts, taxes, insurance, title search, attorney fees, recording fees, down payment, and the amount of cash needed from the buyers. The seller’s side of the closing statement shows their expenses, such as: real estate commission, attorney fees, transfer tax, tax pro-ration, mortgage loan payoff, and the final amount of money the seller will receive at the end of the closing.

• Deed: The deed transfers the home and lot to you.

• Promissory Note: This note is from you, payable to the lender in the principal amount of the loan plus interest.

• Mortgage of Deed of Trust: This document assigns your home as security for repayment of the promissory note.

• Title Insurance for the Lender: An insurance policy that protects the lender against claims, liens or judgments that might arise after your purchase or loan has been completed.

• Title Insurance for the Borrower: A supplemental policy you can purchase to protect you against claims, liens and judgments that might arise after you close on your home.

• Home Warranty: Another optional policy you can purchase to Protect your home systems and appliances against breakdowns.

Closing on a new home varies from state to state, but your lender should be able to get you ready for the closing. Be sure to get copies of everything you sign – and keep them in a secure place.