Closing on your home can be quite complicated, especially if you don’t know what you’re doing. So, in an effort to get the entire process moving a little more smoothly, we’ve put together the five basic steps of closing a home. Read on to prepare yourself for your next closing.
Step 1: Starting the Process
The first step to closing on your house and moving in is to set up an escrow, or sales, contract. Setting up the contract gets the ball rolling. It is during this time that loan payoffs, tax information, maintenance fees, reports, inspections, and other legal papers are ordered while the title commitment is reviewed.
Step 2: Title Search and Examination
During this step, a search of the public records is conducted. Previous mortgages, deeds, assets, wills, liens, divorce settlements, and other documents that might affect the title to the property are examined. The legal owner of the property is determined and any debts owed against the property are also confirmed.
Step 3: Document Preparation and Requests
At this point, you’re pretty much halfway to moving into your own home. During the third step, it is time to review lender instructions, review other instructions from other parties, look over legal and loan documents, prepare closing statements, assemble charges, and set the closing date.
Step 4: Settlement and Closing
The settlement and closing stage is basically the home stretch of the process. This is where you sign the deeds, sign the new mortgage, pay off the old loan, and sign onto the new one. All transaction fees are paid now, too.
Step 5: Post-Closing
After the closing, your title agent will send final payment to prior lenders and pay all parties that have provided services in connection with the closing. This step actually happens without the presence of the buyer or the seller.