Closing
Once the underwriting stage is complete, it will soon be time to close. Texas is one of many community property states. You should be aware that even if your spouse is not on the loan, most programs require the spouse be present at closing and to sign some of the disclosures. Your mortgage team will coach you through this process.
Closing Disclosure
This is a five page form that provides final details about your mortgage, including loan terms, the monthly payment, down payment amount, closing costs, pre-paid items, and any discounts or credits being provided.
Down Payment
This is a percentage of your home’s sale price, usually between 3.5% and 20%. The amount you bring will be discussed in detail by your loan officer to determine the best loan structure for your needs.
Closing Costs
These are generally fixed fees between the lender, title company and third-party vendors to originate and close the transaction. The first payment will likely be included in your closing costs.
Prepaid Fees
These are the amounts needed for accurate accounting of you loan and include the prepaid daily interest, homeowners’ insurance and establishment of the escrow account.
Escrow
When your monthly mortgage payment includes the taxes and insurance charges, the payment is considered to be escrowed. Each month, the escrow account provider will hold a portion of your payment for taxes and insurance. Once the taxes and insurance are due, the escrow account provider will distribute payments on your behalf. Having an escrow account is usually a client’s decision, however there are some programs that require an escrow account.
Closing Documents
- Driver’s license for everyone signing on the loan
- Funds to close (cashier’s check or money order)
- Survey
- Proof of required repairs (if applicable)
- Mortgage note
- Title insurance
- Deed
Closing Information
Closing typically take place at a title company office and lasts 1 ½ to 2 hours.