Buying a Home in Iowa City: Step 7: You're Closing on Your New Home!
This is the last part in a 7 part series that gives a detailed look at how the home buying
process works when you buy a home in the Iowa City area. I've included links to the other parts at the end of this post.
You're almost there...Closing day is just around the corner... Ideally, 48 hours before you close we will get a HUD Statement, (settlement statement) from your lender showing exactly how the proceeds of the sale will be distributed. It will show the closing costs and they should correspond pretty closely with the costs shown on your GFE, (Good Faith Estimate), that you received when you first spoke to the lender. It will also show you how much the check will need to be for that you need to bring to closing. (It may need to be in the form of a Cashier's Check, the lender will let you know if that's the case).
I say ideally, because we don't live in a perfect world and lenders get busy and often don't provide the HUD Statement until much later. I work with a lot of first time buyers, so I usually put in some extra effort to get the HUD in my hands as soon as possible. My clients are usually anxious before closing and it's one less thing for them to worry about if they know what's on the HUD before the day of closing.
The very last thing you do before closing is the final walk through of the home. Sometimes this happens directly before closing. More often, (at least with me), it happens the day before. I really am not a fan of surprises on the day of closing, so going through the home the day before makes more sense. That way if there are any minor problems to be taken care of the seller can still get it done before closing.
Okay, so the big day has arrived and you're ready to close on your new home. All you need to do is show up at the closing location, which may be the Attorney's office or the Lenders office with check in hand. This is when you get to sign the HUD Statement, the Home Loan Documents and the Mortgage Agreement. Not to mention a bunch of disclosure statements and other papers required by the lender. You get quite a work out - there's a lot of paperwork to be signed!
Contrary to common usage of the word, the mortgage is not the actual debt. It's the the security the bank uses for that debt. This is probably over-simplifying it a bit, but if you kind of think of the house as collateral for the debt, that's what the mortgage is. It's worth knowing that even if your spouse is not on the loan he or she will still need to sign the mortgage. Just thought I'd throw that out there, because I know it confuses some people. Particularly that last scenario when a spouse needs to sign, even when they're not on the loan.
Anyway, getting back to the all important day of closing. Once your done signing documents the seller will sign the deed transferring property and a few other documents. (It's not unusual for these to be signed before closing and brought to closing by the sellers agent).
The entire process takes about 45 minutes and when we're done you get the keys and the garage door opener and you're on your way!
That's it. That completes my series on what it takes to buy a home in the Iowa City area...
If you're a first time home buyer, just a reminder that time's a tickin' when it comes to the first time home buyer tax credit. It's due to expire on November 30. It may be extended, it may not - I don't know and I'm not going to add to the speculation. I can tell you what I do know - Home prices in the Fall are usually lower than in the Spring. Interest rates are at or around a very low 5.00% right now. Those two together are already reason enough to buy a home now. And then there's the $8000 dollar tax credit - It looks like a winning situation all round, don't you think?
Not quite there yet? Give me a call, or drop me an email. I'd love to help you figure out the best plan of action for you.
Buying a Home in Iowa City: Links to the other six steps:
Step 1: getting pre-approved for a home loan
Step 2: choosing the right area to live
Step 3: Finding the Right Home
Step 4: Making an Offer
Step 5: Home Inspections and Repairs
Step 6: Preparing to Close on Your New Home
Let's Connect and Get To Know Each Other...
Please remember that opinions expressed in my blog are just that - opinions - not fact
For legal or accounting advice please consult with a professional
Although the information provided is deemed reliable, it's not guaranteed