Closing Facts

5 Closing Facts for Home Purchases

1. What is closing? Closing is the legal transfer of property ownership, also called settlement.
2. Who attends closing? In most states, closings are in person, although remote closings are becoming more common. The participants may include you and your agent, the seller and their agent, and each party’s attorney.
3. Where is closing held? Typically, closings are held at a title company’s office. Their job is to confirm the current legal owner of the property, reveal any mortgages, liens, judgments, or unpaid taxes on the property. Any restrictions affecting the sale of the property will be identified. Problems need to be corrected before a buyer can receive “good title.”
4. What do I need to bring to closing? Your agent will advise you to provide a cashier’s check for the down payment and closing costs, proof of homeowner’s insurance, and a photo ID. If you are wiring funds for the closing, beware of emails with last minute changes to your payment or wiring instructions. It may be a scam.
5. What happens at closing? You will sign many documents in front of a notary, potentially including:
   1. HUD-1 Settlement Statement – details all funds changing hands between buyer and seller
   2. Truth-in-Lending Act disclosure statement – a final summary of the terms of your loan
   3. Mortgage note – a legal obligation to repay the lender according to stated terms
   4. Deed of trust – the legal transfer of ownership, which also gives your lender a claim against your home in case you fail to meet the terms of your mortgage
   5. Affidavits – any binding statements by the buyer or seller
   6. Riders – any contract amendments that impact your rights

Review closing documents

Your agent and your attorney will review your closing documents.

Possession is transferred when documents are signed and monies have been paid. You will then receive the keys to your new home. The title company will ensure that the title is transferred at the county recorder’s office.

Be sure to keep your closing documents in a safe place for future reference. Some of the expenses may be tax-deductible.