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The Mortgage Process - Closing
Step 6 - The Closing
The closing step completes the process of obtaining a mortgage. Because it often occurs at the same time that you are purchasing a home, it can be a complex and confusing step. The best strategy for a smooth closing is to know what is involved, think ahead, and get help.
The final days and weeks before closing can be a very stressful period of time for both buyers and sellers. There are major steps that need to be taken before the closing can occur.
Steps required in the weeks before closing
Setting the Closing Date
Securing Title Services
Obtaining Homeowner's Insurance
Obtaining a Certificate of Occupancy
Meeting the Mortgage Conditions
Going on the Final Walk-Through Inspection
At the closing, your mortgage is activated, the title (ownership) to the property is transferred from the seller by recording a deed, and you are given the keys to your new home. You will be required to sign many papers, and to pay your closing costs, and the remainder of your down-payment, in order to finally take possession of your new home.
Steps after Closing
Recording of Deed: After the meeting, the lawyer will officially record the deed and the mortgage at the registry of deeds or local clerk's office. The lawyer usually will not disburse the funds to everyone who is owed money from the sale until the transaction is recorded. When the deed is recorded, you are officially the owner of the home.
Setting the Closing Date
The closing date is specified in the body of the Purchase and Sales Agreement. The date is often coordinated by and between all parties involved in the transaction Keep in mind that, if any changes occur, the closing should take place before your interest rate guarantee (if there is one) expires. Contact your mortgage consultant to find out how long your rate lock guarantee is valid.
Securing Title Services
If you are obtaining mortgage financing to finance your home purchase, the lawyer will take care of the following:
Title Search: A title search is required by the lender in order to protect them against the possibility of a fraudulent sale. Any liens, legal claims, and lawsuits involving the property will be uncovered in the title search. It is the lender's responsibility to order the title search.
Title Insurance: The lender may require you to buy title insurance to further protect you against any unforeseen complications that arise after you have purchased the property. There are two types of title insurance policies: the lender's policy and the owner's policy. The buyer usually pays for both types of title insurance, but only the lender's policy is required in order to close on the property. The lender's policy is required in order to protect the lender in the event a flaw in the title is detected after the property has been purchased. It is your decision whether or not to protect yourself, in the event of a flaw in the title, and purchase additional owner's title insurance. The lender's title insurance fee will be included as part of your total closing costs, ask your lawyer for an estimate.
Property Survey: The lender may require a survey, or plot plan, of the property before closing. A survey is done to confirm that the property's boundaries are as described in the Purchase and Sales Agreement. The survey fee will be included as part of your total closing costs. The required Plot Plan is an estimate of the boundary lines, and is not typically based upon a full instrument survey.
Obtaining Homeowner's Insurance
Homeowner's (or 'hazard') insurance is required in order to protect you and the lender from loss in the event your house is damaged or destroyed. Typical coverage must be in an amount equal to the higher of the loan amount or 80% of the full replacement cost of the insurable improvements, as long as it equals the minimum amount required to compensate for damage or loss on a replacement cost basis.
Obtaining a Certificate of Occupancy
If you are purchasing a newly constructed home, a certificate of occupancy needs to be provided at closing. Typically the builder will obtain the certificate from the city or town. Usually an inspection is required to verify the property meets local building codes.
Meeting the Mortgage Conditions
If you obtain mortgage financing through us, make sure you read and understand any conditions of the mortgage loan offer that are stated in your commitment letter as issued by us. Most conditions must be met at least five days before closing. The name of the Mortgage Consultant who can answer questions that you may have about these conditions is located on the first page of your commitment letter.
Going on the Final Walk-Through Inspection
It is advisable to take advantage of any contractual right that you may have to inspect the property prior to closing. This is your opportunity to ensure that the property is in the condition that was agreed upon. If you notice any major problems, you may have a right to delay the closing but you should only do so after consulting with legal counsel.
If you are purchasing your home without mortgage financing, make sure you understand who is responsible for each closing step; it would be wise to obtain legal assistance.
Call Tony Dhami 905 515 8587, or Sunil Khanna 905 719 7773.
Go back to the King Mortgage home page
The closing step completes the process of obtaining a mortgage. Because it often occurs at the same time that you are purchasing a home, it can be a complex and confusing step. The best strategy for a smooth closing is to know what is involved, think ahead, and get help.
The final days and weeks before closing can be a very stressful period of time for both buyers and sellers. There are major steps that need to be taken before the closing can occur.
Steps required in the weeks before closing
Setting the Closing Date
Securing Title Services
Obtaining Homeowner's Insurance
Obtaining a Certificate of Occupancy
Meeting the Mortgage Conditions
Going on the Final Walk-Through Inspection
At the closing, your mortgage is activated, the title (ownership) to the property is transferred from the seller by recording a deed, and you are given the keys to your new home. You will be required to sign many papers, and to pay your closing costs, and the remainder of your down-payment, in order to finally take possession of your new home.
Steps after Closing
Recording of Deed: After the meeting, the lawyer will officially record the deed and the mortgage at the registry of deeds or local clerk's office. The lawyer usually will not disburse the funds to everyone who is owed money from the sale until the transaction is recorded. When the deed is recorded, you are officially the owner of the home.
Setting the Closing Date
The closing date is specified in the body of the Purchase and Sales Agreement. The date is often coordinated by and between all parties involved in the transaction Keep in mind that, if any changes occur, the closing should take place before your interest rate guarantee (if there is one) expires. Contact your mortgage consultant to find out how long your rate lock guarantee is valid.
Securing Title Services
If you are obtaining mortgage financing to finance your home purchase, the lawyer will take care of the following:
Title Search: A title search is required by the lender in order to protect them against the possibility of a fraudulent sale. Any liens, legal claims, and lawsuits involving the property will be uncovered in the title search. It is the lender's responsibility to order the title search.
Title Insurance: The lender may require you to buy title insurance to further protect you against any unforeseen complications that arise after you have purchased the property. There are two types of title insurance policies: the lender's policy and the owner's policy. The buyer usually pays for both types of title insurance, but only the lender's policy is required in order to close on the property. The lender's policy is required in order to protect the lender in the event a flaw in the title is detected after the property has been purchased. It is your decision whether or not to protect yourself, in the event of a flaw in the title, and purchase additional owner's title insurance. The lender's title insurance fee will be included as part of your total closing costs, ask your lawyer for an estimate.
Property Survey: The lender may require a survey, or plot plan, of the property before closing. A survey is done to confirm that the property's boundaries are as described in the Purchase and Sales Agreement. The survey fee will be included as part of your total closing costs. The required Plot Plan is an estimate of the boundary lines, and is not typically based upon a full instrument survey.
Obtaining Homeowner's Insurance
Homeowner's (or 'hazard') insurance is required in order to protect you and the lender from loss in the event your house is damaged or destroyed. Typical coverage must be in an amount equal to the higher of the loan amount or 80% of the full replacement cost of the insurable improvements, as long as it equals the minimum amount required to compensate for damage or loss on a replacement cost basis.
Obtaining a Certificate of Occupancy
If you are purchasing a newly constructed home, a certificate of occupancy needs to be provided at closing. Typically the builder will obtain the certificate from the city or town. Usually an inspection is required to verify the property meets local building codes.
Meeting the Mortgage Conditions
If you obtain mortgage financing through us, make sure you read and understand any conditions of the mortgage loan offer that are stated in your commitment letter as issued by us. Most conditions must be met at least five days before closing. The name of the Mortgage Consultant who can answer questions that you may have about these conditions is located on the first page of your commitment letter.
Going on the Final Walk-Through Inspection
It is advisable to take advantage of any contractual right that you may have to inspect the property prior to closing. This is your opportunity to ensure that the property is in the condition that was agreed upon. If you notice any major problems, you may have a right to delay the closing but you should only do so after consulting with legal counsel.
If you are purchasing your home without mortgage financing, make sure you understand who is responsible for each closing step; it would be wise to obtain legal assistance.
Call Tony Dhami 905 515 8587, or Sunil Khanna 905 719 7773.
Go back to the King Mortgage home page