Chapter Five

Closing

Overview

The loan closing, or settlement, is a meeting to finalize your loan, issue a mortgage, and receive the keys to your new home.

Chapter Five describes a series of activities that need to happen in the final weeks prior to the closing. The first step is to complete a final review. The final review should be conducted with your planning team, who may help you complete a series of tasks in preparation for closing. Examples of activities you will need to complete include selecting a settlement agent, conducting a title search, conducting a house inspection, and planning for long-term assistance.

Following the discussion of pre-closing activities, the section titled "Allocation of Closing Costs" provides a detailed description of all costs associated with closing. These include fees paid to the lender, advance payments or prepays, and escrow accounts or reserves. The chapter offers an overview of what to expect on the day of closing. This includes signing of papers, the payment of closing costs, and an explanation of costs typically paid by the buyer at closing. Finally, a discussion on revising your action plan is included, followed by a summary and checklist that may be helpful to assure that you are well prepared.

The closing process in purchasing a home varies in different areas of the country. However, the description of the closing process provided in this chapter will give you an idea of what to expect, and will describe the major activities involved leading up to and during the closing.