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AMERICAN CAPITAL
MORTGAGE, INC.
444 Galisteo Street, Suites B & C
Santa Fe, NM 87501
Toll-Free: (877) 663-4422
Direct: (505) 983-9222 or 988-4422
Fax: (505) 983-7988 or 988-3872
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Seven Tips for a Stress-Free Loan Closing
(Originally published in Santa Fe Real Estate Guide / The New Mexican)
The day of loan closing for a home buyer can be a frightening and intimidating experience. Fearful questions may arise. Will the loan interest rate be as expected? Will the funds be available from the lender at closing? Should I have an attorney look over the closing papers?
This fear and concern can be replaced with confidence knowing every part of the closing transaction will go smoothly. Preparation many weeks prior to closing can provide for a smooth loan closing.
- Your loan interest rate should be locked with the lender prior to the closing day. Don’t go to the closing table until you are certain that your mortgage loan officer has determined the details of your loan (rate, amount, term and product type) and that you agree with that determination. If you have any doubt, ask for a written confirmation of your loan details.
- You may want to consider hiring an attorney to review the closing documents and even attend the closing. The vast majority of borrowers do not have an attorney accompany them to closing, particularly if your mortgage company does attend closing. Ask your attorney for his recommendation.
- Prior to closing be sure that you receive a Good Faith Estimate of closing costs and that any explanations you need have been answered by your mortgage company. If you have any questions regarding the closing costs, don’t be afraid to ask. Closing fees are not the same for each company. Question any costs that you consider unreasonable.
- Review the closing statement prepared by the title company prior to closing. Compare the costs to those shown on the Good Faith Estimate. They should match. If they don’t, require an explanation from the title company and the mortgage company. The most important documents that you will sign at closing will be the Note and Mortgage. The Note describes the amount of money that you are borrowing, the interest rate and how long you have to pay it back to the lender. Be certain that the rate and monthly payments are as you expect.
- Review the survey for the property prior to closing to determine if there are any encroachments or easement or setback violations. Your lender will ask you to absolve them of any responsibility for survey irregularities. Ask the title company to explain any survey items that appear unusual.
- Be familiar with the title company’s title policy prior to closing. Understand what insurance they will provide to you and what exceptions will be a part of the owner’s title policy. Ask questions – title companies are there to serve.
- Discuss with your lender when funds will be sent to closing. Will funds be wired or will a check accompany the documents? When will funding occur? If possession of the property is to occur the day of closing, funding preparations must be made in advance. Suki Shepard of French & French Fine Properties said, “Buyers should be informed that the amount they must bring to closing should be in a cashiers check or should be wired to the title company. This procedure will avoid any surprises or delays in taking possession of the property.” Some lenders fund at closing and some do not.
Yes, some closing documents can be changed at closing. If a document does not apply to your particular transaction, question whether you should sign. Changes can usually be made the day of closing if corrections need to be made. Look for mistakes and change them.
Above all, remember that the mortgage company that you have chosen is there to serve you. The company’s function is to prepare you in advance with accurate information. They are your allies. Put them to work many days prior to closing so that the closing day will be a pleasant experience.