For many borrowers, meeting with the closing agent/notary to sign the final documents for their mortgage loan is the end of a long, complicated and sometimes painful process. Even though the lender, title company and the mortgage loan servicer all still have a lot of work ahead of them to get the loan funded, the documents recorded and the deal boarded onto the servicing platform to start collecting payments, the borrower’s work is usually done when the documents are signed at the closing table. Unfortunately, that may not be the case if something goes wrong at the closing, even if it’s not detected immediately.
To make sure that the loan is closed properly and that nothing will come back to haunt the borrower later, here are five things to keep in mind when you are at the closing table.
1. Remember to ask your questions early
The Consumer Financial Protection Bureau’s (CFPB’s) TILA/RESPA Integrated Disclosure Rule changed the way the mortgage industry shares information about a transaction with the borrower. Under the new rule, the lender must provide the closing disclosure three days ahead of the scheduled loan closing. This is designed to give consumers plenty of time to review the numbers and pose their questions before the closing.
Take your time when reviewing these documents as they provide all of the terms of the loan as well as an itemized list of fees associated with the closing. Don’t save your questions for the closing table. Call your lender or settlement agent as soon as you have a question or concern. And don’t feel bad about asking. There are no stupid questions, except for the ones we didn’t ask but should have.
2. Remember to bring your identification
In order to sign the legal documents required to secure your mortgage, you must come to the closing with the proper identification. Typically this includes two forms of identification, one of which should be a valid state-issued identification card with a photo. If you have questions about what to bring, contact your closing agent before the scheduled closing.
3. Remember any paperwork you want to refer to during the closing process
A lot of paperwork flies around during the mortgage loan origination process. Some of these documents may be useful for you to refer to during the closing. This could include your original Loan Estimate, contract, proof of title search or insurance, inspection or appraisal reports and any other documentation you may have collected during the process. Many of these documents will already be part of the loan file that you will review during the closing. Having a previous copy will reveal any changes that might have occurred.
4. Remember to bring any funds required to close
Every real estate closing is different but you will be advised of any expenses you’ll be expected to pay at closing in advance of the closing date. Be sure to bring a certified or cashier’s check made out to the title company for any costs for which you are responsible. These could include closing costs, prepaid interest, taxes or insurance. You can also arrange in advance to have these funds wired from your bank, just don’t forget to make the arrangements.
5. Remember that the closing is about you
The CFPB has made it clear to the mortgage lending industry that the loan closing, and in fact all of the mortgage loan origination process, is really about the consumer. Your experience is important to everyone involved in the process. You have the right to understand 100 percent of what happens and what you are asked to sign.
CFPB urges you to take your time, read through whatever documents you wish, ask what ever questions you have. More often than ever before, mortgage closings are going smoothly and the borrower experience is more satisfying. Remember these five things before you attend your next closing and you are more likely to have a worry free closing.
