"Closing" sounds kind of mysterious - as if big complicated secret events are going to take place. Formally speaking, closing is the final steps of becoming the owner of a property. Those steps frequently overlap with "consummation", which is the process of committing to the financial obligations of buying with a mortgage loan. No mystery or secret, really. Heres the main things that will happen: For most types of home purchases, you will get a Closing Disclosure detailing the loan terms, at least 3 business days prior to consummation (which is frequently the same date as closing.) At the live closing meeting, you should end up with: A copy of your Mortgage Note — the formal document where you commit to pay the loan Your Deed of Trust or Mortgage documents The binding Sales Contract In some states, you might also get the keys to the house; in other states, that physical handover might happen separately. By this time, your real estate and finance professionals should be well acquainted with you and the transaction. Theyve been through this before. Relax, ask questions as you go, and be prepared to sign a few papers! Take the time to read them thoroughly before committing.

If you hear the term "closing day", understand that it refers to a bunch of things that will usually (but not always) happen right at the end of buying a home. Laws and practices vary in different states, but here are some of the common things that might take place on your closing day: Youll receive a formal Closing Disclosure at least 3 business days in advance. Youll provide proof that youve arranged homeowners insurance, such as an insurance binder document or a receipt for the premium. Someone - usually the closing agent - will provide a list and documentation of whats still owed: Down payment remaining Tax prepayment Fees They will also detail any costs owed by the sellers, like: Taxes to be paid Prepaid rent Sellers may also have to provide documentation, like proof of inspection or warranties. Once you are clear on these, you will probably sign the mortgage. The mortgage gives the lender rights to the house; if you dont make the payments, they have rights to recover the loan and interest by selling. You will probably also sign a mortgagenote, which is your promise to repay the loan. You will end up with title to the house, usually in the form of a signed deed. Youll pay all of the closing costs, and receive a settlement statement covering what was paid. The mortgage and the deed will be "recorded" -- literally, put in government records such as a state Registry of Deeds. And now youll be a homeowner. Dont forget the keys!

Books and songs have titles; so do homes! The word "title" has a specific meaning in relation to property; it essentially means valid, provable ownership. If you "hold title" on a home, you own it. Its not as automatic and clear-cut as you might expect, so its worth watching this short video to get the basic idea. If youve ever played a board game where you own properties, houses and hotels...thats a great way to get keep "title" in mind. Imagine what would happen if the game table fell over, and all the pieces and cards were scrambled. Being absolutely sure who owns what, and where the pieces should go, suddenly gets complicated. Fortunately, in the world of real property, government entities act like a neutral party keeping records. In the long run, your home may become one of your biggest assets. You can insure your ownership of the asset with title insurance. Meet Stickman; hell explain title insurance with that board game.

You are likely to hear the term "closing" frequently in buying or selling a home. That short word captures most of the final steps involved in finishing the transaction and financing, and becoming the owner. Many of these steps have costs, so youll hear the term "closing costs" as well. Closing may be a small word, but closing costs can become sizable. Buyers are well advised to understand the cash that will be needed for closing costs as early as possible. Required forms and steps in the mortgage process, such as the Loan Estimate form covered in other videos here, will help you know the range of costs to expect. This short video will help you relate various closing costs and processes to understand them more clearly.