Sep 24, 2017
First, you're blindfolded. Then you're led down to the dungeon.
Closing should be (relatively) quick and painless.
A transaction doesn't officially "close" until the loan documents are signed, the loan funds are disbursed, and the deed is recorded at the courthouse. In Washington State, signing and funding usually occur separately. You will likely sign your loan documents a day or two before your loan actually funds or closes.
After final underwriting approval, loan documents are sent to to the escrow company by email.
Once the escrow company receives the loan documents from the lender, they will call you to schedule an appointment. They probably won't put you on the schedule until they have those documents in their hands. They're funny like that.
The escrow agent (or LPO, Limited Practice Officer) will answer any questions you have. I also try to attend my signings. It isn't always possible (because I don't make the appointment and sometimes already have a conflict). But I'll make every effort to be there.
At signing, you will be asked to produce an (unexpired) driver's license. You will sign approximately 1,000 pieces of paper. Seriously. Practice your signature now! You don't want to get hand cramps!
You will be asked to sign exactly as your name appears. For example, if your name is listed as "Jonathan Ignatius Hancock," you'll sign every loan document with your full legal name. You can't sign "John Hancock" and be done with it.
Take all the time you need to review the documents, but remember your loan probably isn't going to fund for a day or two. So you can always review the paperwork at home. If you're refinancing, you'll have a three day "rescission period" before your loan funds.
The seller can sign ahead of the buyer. If you're getting an FHA or VA loan or taking advantage of a Mortgage Credit Certificate, there will be a few items in the lender's package for the seller's signature. Let me know, and I can get those documents to the seller in advance.
Your escrow agent will also tell you when and how to wire your down payment and closing costs. Wiring the funds is preferable to writing a check. The escrow company probably won't accept a personal check. And they may have to hold a cashier's check for 24-48 hours. Cough up the extra $30 to your bank, and have the funds wired.
Keep in mind that you must wire funds from an account the underwriter has reviewed and approved. If gift funds are being wired to escrow, the account number must match the account number on the gift letter.
We probably won't know exactly how much you'll need until a day or two before closing. If you want to wire your funds early for extra credit, just add a little extra to your latest estimate. The escrow company can always cut you a refund check after closing.
Your loan probably won't fund until a day or two after you've signed the closing documents. That's when all the money will be distributed: Your lender will wire your loan amount to escrow. The seller will get their check and the seller's mortgage will be paid off (if there is one). Escrow will also pay your homeowner's insurance premiums, any property taxes that are due, and HOA fees.
After funding there is one more step: recording. The escrow company will take a couple documents down to the courthouse - usually the Warranty Deed (which transfers ownership of the property from the seller to the buyer) and the Deed of Trust (which secures the lien; this is the document that allows your lender to foreclose if you don't pay!). Once those documents are filed at the courthouse, you are officially the property's new owner.
Time to collect your keys and get moving!