Closing a Home Loan

What happens at closing?

You will sit at a table with your broker (if you used a real estate agent) and a closing agent (usually a lawyer or a title officer). The closing agent will have papers for you and the seller to sign. He or she will give a basic explanation of each paper, take time to read each document completely so you know exactly what you are signing. Before going to closing, your lender is required to give you paperwork explaining the closing costs (good faith estimate). This document will outline how much cash you will have to bring to closing, and the fees you are being charged. If you do not receive this document, be sure to call your lender BEFORE you go to closing. Never hesitate to ask questions.

Documents you will need to bring to closing:
* Paid homeowner's insurance policy or binder.
* Drivers license or official photo identification.

Once you completely understand all the documents, you will sign the mortgage agreement. This obligates you to make your mortgage payments on time, and if you don't the lender can sell your property and apply the proceeds to the amount you owe them.

The closing agent will give you a settlement statement that outlines all the items that you have paid. The deed of trust and mortgage not will then be recorded. You are now a homeowner!

What are closing costs?

Closing costs are fees you will be charged when you buy a home and get a mortgage. They also include taxes and fees paid to the state and local government.

Typical closing costs may include:
* Loan origination fee
* Discount points (if applicable)
* Appraisal fee
* Credit report fee
* Inspection fees
* Pre-paid interest
* Hazard insurance premiums
* Escrow account deposit (for taxes and insurance)
* Title charges
* Government recording and transfer charges:
* Property survey
* Termite inspection
* Lead based paint inspection
* Radon testing