What to Expect at your Mortgage Closing

When buying a house, it does not officially become yours until closing. A home loan closing is essentially the meeting where the property and funds legally change hands between the buyer, seller and lender. It’s the time when the ownership of the property is transferred.

Knowing what to expect at closing can make it go a bit easier for you. First, your lender will contact you a few days prior to your scheduled closing to review your loan amount, first payment date, etc., to make sure there are no surprises at closing.

Paperwork

During the closing you review and sign several loan papers. You sign the Mortgage, Note, the Truth-in-Lending document, Settlement Statement and any other documents required by Wisconsin’s state laws. Here’s a bit more depth about the four types of paperwork you’ll sign:

Mortgage. This document pledges the property to the lender as collateral for repayment of the mortgage debt. Essentially this means that you will give your property up to the lender in the event that you cannot make the mortgage payments.

Note. This is the document you sign to agree to repay your mortgage. The note will provide you with all of the details of your loan including the interest rate and length of time to repay the loan.
Truth-in-Lending Statement (TIL). This document provides full written disclosure of the terms and conditions of a mortgage, including the annual percentage rate (APR) and other fees.

Settlement Statement. This document provides an itemized listing of the final fees charged in connection with your loan. The settlement statement will also include a listing of any fees related to the transaction between you and the seller.

Funds

Money is transferred at closing to finalize the home purchase. This is done with a cashier’s check (that you will bring with you) or a wire transfer (sent directly to the closing agent or attorney). Your lender will let you know which form of payment to use in advance, and the amount. The amount covers your down payment and any closing costs. Closing costs include a variety of expenses like the appraisal and attorney fees, homeowner’s insurance, any points that you purchased and more.

Escrow

Another part of the closing is for the lender to set up an escrow account to pay for your property taxes, home owners insurance and mortgage insurance (PMI), if applicable.

The final step in closing is getting the keys. It is now your house. While you go try out those keys and move in, all of your documents are being filed at the appropriate places to ensure that the transfer is complete and successful.

About UW Credit Union

This information is provided to you courtesy of UW Credit Union, based in Madison, WI. UW Credit Union is a leading provider of home loans in Dane County and throughout Wisconsin.

For more information about the home loan process, please contact a UW Credit Union Home Loan Specialist at 800.533.6773, ext. 2810, or vist UWCU.org.