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What happens during closing

Once the closing gets under way and the closing officer has verified that you have your binder and your paid receipt for homeowners insurance, he or she will explain each closing document and ask you to sign each of them. Your closing officer will answer any questions you have about the documents before you sign them, so don’t hesitate to ask.

Typically, the closing officer will begin by reviewing the mortgage note (.pdf) and the mortgage document (.pdf) and ask you to sign them. Then, he or she will move on to the Settlement Statement (.pdf). Beginning on the back of the form — where each of the costs being paid by the sellers and the buyers is itemized — you will find a breakdown of the costs, including:

  • all the buyers’ and sellers’ closing costs

  • a summary of both parties’ transactions by showing how funds are transferred among the buyer, seller, lender and any other parties involved in the sale

  • the net amount due from the buyers and the net amount that will be paid to the sellers

  • commissions to real estate agents involved in the sale

  • any lender’s charges made in connection with the loan, such as points and other fees

  • items that the lender may require to be paid in advance, such as interest due from the date of the closing until the first mortgage payment

  • amounts deposited in escrow to cover insurance and property taxes

  • title charges for the title search required by the lender and title insurance policies for the lender and the buyer

  • charges to cover recording the mortgage and deed at the county courthouse

  • tax service fee to cover the lender’s cost of researching the tax rate for the property.

The closing officer will then go over the summary of each party’s transaction (on the front of the Settlement Statement). The left column summarizes the buyer’s transaction and the right side summarizes the seller’s. The sales price of the home is listed at the top of both columns. Amounts are added or subtracted in both columns to arrive at the net amounts due from the buyer and due to the seller.

After the closing officer has covered the entire Settlement Statement, he or she will ask for a check for the down payment and closing costs. When all of the buyer’s documents have been explained and signed, the closing officer will move on to the seller’s documents.

After the Settlement Statement, the closing officer will review both the Deed and the Commitment for Title Insurance, making sure that the legal descriptions on each document match exactly.