Close the Loan
01. Closing
Closing is the final step in a real estate transaction, when ownership passes from seller to buyer. It is generally finalized by the purchaser signing the loan documents and paying closing fees.
On this date, the deed and deed of trust are recorded with the county recorder's office in the buyer's name and the proceeds of the sale are given to the seller after paying off any outstanding loans and fees. Sometimes also referred to as the settlement.
- After your loan is approved, it will take at least a week or two to complete the transaction.
- The lender will draw up formal loan documents and handle the details. Whether you're buying or refinancing, the closing itself will probably take less than an hour.
- Closing procedures vary throughout the country. If you're buying a home, the closing will likely take place in the office of the escrow agent or attorney who oversees the transaction.
- If you're refinancing a loan, the lender may call you into the office to sign the documents.
02. Be Prepared
- If you're buying a home, be prepared to bring a certified check or money order for your down payment and closing costs.
- The seller won't exchange the house keys for a personal check. The escrow officer or closing attorney will have a check from the lender for the amount you have agreed to borrow.
03. Read Before Signing
- Review your loan documents carefully, and don't be afraid to ask questions. Refuse to sign them if they contain an error, or if there is something you don't understand that is not answered to your satisfaction.
- Remember, once your signature is on the loan papers, you're committed to abiding by their terms for the next 15 or 30 years.
- For descriptions of common closing documents, see Documentation.
- Why does this cost so much? See Closing Costs and Fees.
04. Sign
- Sign the note and trust deed.
- After they're signed, you'll endorse the bank's check and give it to the seller in exchange for the deed or mortgage to the property.