Step by Step Tips When Closing Your Mortgage
The steps at the mortgage closing meeting can be very important, and should be planned ahead, and done correctly. The lender and the mortgage broker have been doing such mortgage closing meetings quite a lot, and can review this process with you. Here you can read the steps which will be done from the beginning to the end of the meeting.
Invest In Education
If you are in a process of a mortgage shopping or approval you must invest in some mortgage education. Now that is not free article reading like you are doing know, thats just filling your ceriousity.
The tips and tricks you realy need to know, you will not find ‘free’ on the internet. If you think education is expensive… try ignorance. This becomes true when it comes to mortgages. People just know too little about the process, and the lenders rape them with fees and costs that mey be easily avoided. Your golden hen will be learning ‘inside information’ from a former banker who have broken the lenders ‘code of silence’.
You will see below 5 critical steps and tips to know prior to the mortgage closing meeting – they will be highlighted.
Who Will Be Attending The Mortgage Closing Meeting
As mentioned before, your mortgage broker, mortgage attorney or the lender may have been in many mortgage closing meetings. The best advice would be to ask them how they expect the meeting to take place, which documentation and proofs they might want to see. This is important, because when these requests come up in the meeting and all the eyes are turned at at you, you better be ready.
Unlike all the meeting which you have been attending until now, the closing meeting may be a bit more crowded. All the people who have are connected to th deal should be there. Tip 1 – Ask in advance who will attend so you know can prepare better, if the seller brings an attorney – bring an attorney too!
Who may be attending this meeting :
- You – The buyer and borrower.
- Your mortgage broker
- The Seller (and his/her spouse partner)
- Their mortgage broker
- The lender and their attorney
- Or Title insurance or Escrow company which are permitted in some states to manage these meetings.
- Your attorney (recommended) or the seller attorney if they have one (recommended)
Prepare The Documentation For Closing
At the mortgage closing meeting will a lot of documentation signed and reviewed. Make sure you ask and prepare th documentation exactly as requested. If you think that you have not collected all the papers and approvals, contact the lender and double check. If you have difficulty knowing which information will be expected, ask even twice to be sure, you know.. ‘better safe than sorry’ is relevant to the mortgage closing meeting too.
Here are some of the documents and issues commonly YOU will need to be responsible of completing before the mortgage closing meeting:
- Homeowners Insurance – The lender would like to see that you har insured by insurance for any physical damage to the property. Tip 2 – Make sure you know exactly which hazards the insurance you do covers, as the lender may want a specific insurance on common or uncommon hazards like floods, fire, earthquake, tornado storms. That is why this is called too Hazard insurance.
- Title Insurance – This insurance protects the lender from last minute ‘surprises’ – They have seen everything and been in such positions that anything may be possible for them like “unknown heirs”, forgery, credit identity theft…
- Title search report – This is important to have as it is the legal documentation proof that the property is clean from any liens, negative marks and it is ready for the legal ownership to be transfered.
- Termite, well, sewer or septic certificate – Some lenders will ask for these items to be pre-checked and certified. This may be part of the appraisal check “as is”, or may be items that must be repaired prior to the completion of the mortgage transaction. See the FHA appraisal guidelines 2011 review.
What Will You Be Signing At The Meeting
Documentation For The Mortgage closing meeting (might vary from state and property involved)
- HUD-1 Settlement Statement – This is the final document with the fees, credits and costs concerning the real estate terms you and the sellers agreed upon. The HUD-1 Settlement Statement may be slightly differnt from the Good Faith Estimate (GFE) document. Tip 3 – The fees in the HUD-1 should not be ore than 10% higher from those presented at the GFE. Tip 4 – Get the HUD -1 document three days in advance, as you may be requested to bring a bank cashier’s check, because your personal check may not be accepted.
- Truth in Lending (TIL) disclosure – This is part of the Truth in Lending Act (TILA), is a document you should have received by the lender, it summarizes your expected annual percentage rate (APR) payments. In this document there will be all the figure about monthly payments, rates, interests, fees and all the mortgage financing figures. Tip 5 – Since the TIL may be changed over the period of time and party agreements. By law your lender must send you the most recent TIL document they have, if had been modified they must allow you to see the recent one before the mortgage closing meeting.
- Promissory Note – This is a document where you sign that you will be paying all th payments on time. It is a ‘mirror’ document to the Truth in Lending, it summarizes your part of the deal.
- Loan Documentations – These are the documentations of the mortgage loan, with all the lien explained that if you are late on your payments, your new home you have just bought becomes the property of the lender.
- The Deed – This is the document which transfers the ownership of the home over to you – Congratulations! You are a home owner!
Well, you are not a homeowner yet.. the home belongs to the lender until the last payment is fully paid…
So What Can You Do To Improve Your Situation?
If you will do nothing.. don’t expect anything to happen. The best advice is to bump your credit score up! It will give you better leverage when facing the lenders, and better negotiation position when applying for any financial need.
Lets not forget you are probably paying $500-$1000 extra per year in higher interest rates, and credit payments.
If your score is below 700, you might want to clean it yourself – get this ‘Credit Repair University’ which will save you money and time.
Yes, you might need to invest a small sum to get a grip of things.. But if you think education is expensive.. try ignorance..
You are probably paying thousands of dollars per year in fees and interests to credit companies which could be going straight to your pocket. Don’t be cheap when it comes to financial education.. Ignorance costs more.