Mortgage closing guide, Carmel, Indiana

• Application Checklist

Buyer's Guide:

Closing the Mortgage

The closing (or settlement) is the meeting at which you sign the paperwork and pay all expenses to take official ownership of your home. If you're looking for a day to celebrate buying your new home, circle this one on your calendar.

Although the closing process varies from place to place, many activities are standard. You'll be required to sign certain documents and pay closing costs. You will also be advised as to how to make your payments.

How much will your mortgage closing costs be?

Prior to the closing meeting, the Title Company, Escrow Company or attorney will review with you a copy of the HUD-1 Settlement Statement. This document will provide the final total for your closing costs. It establishes the total funds you must bring to closing. You'll need to obtain a certified or cashier's check for this amount. Personal checks usually aren't accepted.

What happens at your mortgage closing?

Many of the people involved with the purchase of your new home will attend your loan closing. This includes you, the seller(s), their attorney (if they have one), both real estate agents, and, of course, the closing agent. The meeting usually takes about 1 hour and is held at the closing agent's office. In that case, either an escrow, closing agent or attorney processes all the paperwork, arranges for all documents to be signed, and collects and disburses the required funds.

The steps below explain what happens during and after the mortgage closing:

• Closing agent reviews settlement sheet with you. Both you and the seller sign the settlement sheet.
• Signatures are collected for loan documents, such as the mortgage or deed, note and Truth-in-Lending statement. Evidence of required insurance and inspections is presented.
• If everyone agrees papers are in order, you submit a certified or cashier's check to cover your down payment and closing costs. (Or, in some proceedings, it is drawn from an escrow account established for your home purchase.)
• Lender provides check covering the home loan amount to the closing agent.
• If your monthly payments are to include property taxes and insurance, a new escrow account (or reserve) is established.
• You receive the keys to your new home.

A few of the key mortgage closing documents you receive:

HUD-1 Settlement Sheet
Itemizes the services provided and the charges to the buyer and the seller. You should be allowed to review this form a minimum of 24 hours before your closing meeting so you know your closing costs in advance.

Truth-in-Lending (TIL) Disclosure
You should be mailed your initial TIL disclosure within 3 business days after applying for a home loan. It outlines the costs of your loan and discloses the APR and other terms of the loan, including the finance charge, the amount financed, the payment amount, and the total payments required. Since it's possible that the annual percentage rate (APR) calculated at your loan application will change a little before closing, your lender is required to give you the final version of your TIL disclosure at or prior to the closing meeting.

Deed of Trust or Mortgage (also Security Deed)
Documents conveying a lien on your property as security for repayment of your home loan. (If you default on your loan, your lender has the right to foreclose your ownership interest and take possession of the property.)

The Note
The mortgage (or promissory) note is a legal "IOU." The note represents your promise to pay the lender according to the agreed terms, including the dates on which your home loan payments must be made and the location to which payment must be sent.

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