First Time Home Buyer's Guide to the Closing Process

As a first-time home buyer, there are many new changes about to happen in your life and with that comes many new learning experiences. One of the biggest unknowns you may be experiencing is preparing for the closing day and wondering how that process will work.

You know it’s the day where you’ll be spending some money and signing paperwork, but what exactly should you expect for the close? Take a look at this guide to make sure you have a better understanding of the closing process well before you experience it.

The goal behind closing day

This is actually the most exciting day of the home buying process and one you should look forward to most. It means that your hard work has paid off and you are becoming the official owner of your new dream home.

Closing day is when all of the talks finally gets put down on payment and your dream becomes reality. There are many details in the process, but the goal behind the closing day is to pay off final costs, to sign the paperwork, and to finalize everything once and for all.

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What to expect leading to closing

You’ll actually need to be preparing for closing the day before closing. This is the time to be gathering all of the paperwork that you’ve gathered during the entire process because you may need to reference these on closing day. This could include anything from your loan estimate to your inspections reports, as well as proof of title search and the closing disclosure.

Next, you’ll want to take the 24 hours before closing that you are entitled to in your contract to do a walk-through inspection. If it appears the seller hasn’t vacated or things aren’t in the condition discussed, this is the time to speak up.

Any problems that were to come up would then delay closing so that they can be addressed. You can also request that the seller deposit money into the escrow account if you are going to have to make the repairs.

Closing day

Now that you’ve arrived at closing day, you’ll have to sign the paperwork and pay final expenses. First, you’ll sign legal documents including the agreement between you and the lender, followed by the agreement between you and the seller as you transfer ownership.

Closing costs and escrow items will then need to be paid, typically by bringing a check with you, as far as costs that aren’t going to be added to the loan balance. The typical closing costs would be for line items such as the home inspection, appraisals, title search, surveys, and credit report.

A few people will be present at the closing including the real estate professionals on behalf of the buyer and seller, the builder representative if it was a brand new home, the buyer and seller attorneys if applicable, the closing agent, and a notary.

In some cases, the seller may be present, but it is not typical. You’ll have to sign plenty of paperwork including the closing disclosure, the mortgage, and the promissory note. Be sure to bring your checks to the closing, which can be prepared in advance, as well as your ID.

If you’re feeling overwhelmed by all of the new learning experiences as a first-time home buyer, this guide should help you understand what to expect on your upcoming closing day.