Houston Mortgage First-Time Homebuyer: FAQ-Series: Part 9

Closing on Your New Home

Houston Mortgage Lender FAQOnce you have found the perfect home and you have settled on a price, it is time for you to make it official by closing on the home. By getting answers to these Frequently Asked Questions (FAQs) about closing, you will be better prepared for this final step in the purchase process.

What happens after I apply for a mortgage loan?

After you apply for a mortgage loan, it will take anywhere from one to six weeks for the lender to complete the evaluation of your application. During this time, don’t be surprised if the lender
contacts you and asks for more information. If more information is requested, be sure to supply it as quickly as possible. Otherwise, it may take even longer for your application to be processed.

Once all of your information has been verified by the lender, the lender will call you to let you know whether or not you have been approved. If your loan has been approved, a closing date will be set up and the lender will review the details of the closing with you. You will have the opportunity to conduct a final walkthrough before closing, after which you will be able to move into your new home.

What should I do during the final walk-through?

If the homeowner still occupied the home while it was still on the market, the final walkthrough may provide you with your first opportunity to view the house without any furniture or other items. As such, you will get a clear view of everything in the house. Be sure to check the walls and ceiling carefully during the final walkthrough. You should also check on any work that the seller agreed to complete prior to closing. If you find any problems during the final walk-through, be sure to address them prior to closing.

What is included in the closing cost?

While there are some unique factors that may affect your closing cost, factors that are typically included in the calculation of closing costs include:

  • Escrow fees
  • Attorney’s fees for you and your lender, if applicable
  • Interest fees from the date of closing to 30 days before your first monthly payment
  • Loan Origination fees, which includes administrative costs
  • Recording fees
  • Survey fees
  • Loan discount points
  • Title insurance for yourself and the lender
  • Documentation preparation fees
  • First payment toward the escrow account for real estate taxes and insurance
  • First month’s premium on mortgage insurance, if applicable

You will also need to bring a paid receipt for your homeowner’s insurance policy when you go to your closing.

What can I expect to happen at the closing?

When you go to the closing, you will be asked to present either your paid homeowner’s insurance policy or
the binder and receipt showing that you have paid your premium. The seller, on the other hand, will provide proof of inspection, warranties and other pertinent information.

After reviewing the documents that you and the seller have brought to the table, the closing agent will present you with an itemized list that shows how much you owe to the seller and how much the seller owes you. Expenses that you owe may include things such as the remainder of the down payment and prepaid taxes, while money the seller owed you may include things such as unpaid taxes and prepaid rent.

Once all of the necessary documentation has been reviewed and you feel comfortable with it, you will sign
the mortgage agreement. By signing the agreement, you agree that the lender is entitled to sell your property and to apply the sale price against the amount that you still owe on the loan if you fail to make payments as agreed upon. You will also sign a mortgage note at the closing, which is a document promising to repay the loan.

After you have paid the closing costs and signed all of the necessary documentation, the seller will give you the title to the house and the deed and mortgage will be recorded in the state Registry of Deeds showing you as the owner. The lender will also provide you with a settlement statement, which will list all of the items you have paid.

What items will I receive at the closing?

After you have signed all of the necessary paperwork, you will get many documents to take to your new
home with you. Some of the documents you will receive at closing include:

  • Settlement statement, which itemizes the services provided to you as well as the fees charged
  • Truth-in-Lending Statement
  • Mortgage Note
  • Mortgage or Deed of Trust
  • Binding Sales Contract
  • Of course, you will also receive the keys to your new home! At long last, the home is all yours!

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