Now you are ready to close

You already know how to:

• Budget for a home

• To look for your dream home

• To find a lender and apply for a loan to purchase that dream home.

Now it is time to discuss how you are going to survive the "closing process" of that loan on your "Dream Home!" The closing of a home loan is the most confusing and difficult part of the home purchase process. There are many forms that you are asked to sign. You may encounter good and not so good closing agents. There are a few things about the loan closing that you should always remember:

• Never be intimidated by your closing agent. The closing agent may close several loans a day. They become so familiar with the forms and process, that sometimes they forget that you are novice.

• If you do not understand what you are signing, don’t sign until the closer has explained the form so you can understand it.

• Remember, it is your signature on the dotted line, not the closer’s. The closing company is getting paid a fee to close your loan and you should expect excellent customer service.

Your lender, real estate agent or closing agent, will contact you to let you know when it is time to close your loan. All parties purchasing the home should be present for the closing. On occasion, if one of the parties is out of town at closing time, documents may be signed ahead of time.

The following is a list of typical "closing documents."

• HUD 1 – Settlement Statement

• Addendum to HUD 1

• Assessor’s Letter

• Truth in Lending Disclosure Statement

• Escrow Disclosure

• Assumption Disclosure

• Prepayment Letter

• Affidavit that there are not Outside Agreements

• Mortgage or Deed of Trust

• Note

• Termite Certificate

• Survey

• Survey Disclosure and Receipt

• Encroachment Affidavit (if needed)

• Flood Zone Disclosure

• Loan Application

• Addenda to Loan Application

• Warranty Deed

• Lien Affidavit

By now you are probably saying to yourself: "What have I gotten myself into?" Right? Well, just remember, everyone that buys a home has to sign some, if not all, of these closing documents. It is all just part of the responsibility of being a homeowner. But by reviewing this section, you should feel perfectly comfortable with the closing process.

There are three (3) basic types of residential closings:

• Closing of an FHA loan

• Closing of a VA loan

• Closing of a Conventional loan

Many of the same forms are used for any of the three (3) basic types of closings. We will review each of the common forms and discuss other forms that may be included in only some closings.

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