If you are making a real estate transaction, whether it is selling or buying, you may have questions about the closing. Here are some real estate closing facts.
Real Estate Closing Facts | The Basics
The closing is comprised of two basic parts. If you are the buyer, the first part is your meeting with a bank attorney where you will sign all of the loan documents. Generally speaking, this takes about a half an hour. You will be signing a note, which is the bank’s promise to lend you money at a certain interest rate for a certain term. Traditionally, the note will also state that you can prepay it without any penalties and describe what might happen if you are late in making your payments.
Real Estate Closing Facts | Mortgage
You will also sign a mortgage. The mortgage documents the security interest the bank has in the property that protects it if you don’t pay your mortgage or taxes, if you fail to keep insurance in place, or if you don’t properly maintain the house. If you don’t do any one or more of those things, the bank is entitled to either call the note due or foreclose upon the property. That’s very rare, and I like to think that my clients do not get themselves into trouble with their lender. Then, the mortgage is generally an irrelevant document.
Real Estate Closing Facts | Closing Disclosure
The third document you’ll sign is called a closing disclosure. That document is the complete financial snapshot of the transaction. It shows the purchase price and lists the credits that go back and forth between the buyer and the seller for things like taxes, initial deposits, or credits for repairs that need to be undertaken based upon the home inspection. It will also identify various costs the buyer owes to the lender to complete their transaction and to the local government for things like recording costs for the deed and the mortgage.
These Real Estate Closing Facts were brought to you by Cole, Sorrentino, Hurley, Hewner & Gambimo, P.C.