Understanding the Closing Process: A Guide for Homebuyers
Buying a home is an exciting milestone, but it's also a complex process with many steps. One of the most important steps is the closing process. This is where the final details of the sale are ironed out, and ownership of the property is transferred from the seller to the buyer. In this guide, we'll take a closer look at the closing process, so you know what to expect as a homebuyer.
What is the closing process?
The closing process is the final stage of the home buying process. It typically takes place at a title company's office or attorney’s office, where all the necessary documents are signed, and funds are exchanged. The closing process usually takes about 30 to 45 days from the time the purchase agreement is signed.
What happens during the closing process?
During the closing process, you'll work with a title company or attorney to complete the following steps:
Review the Closing Disclosure: You'll receive a Closing Disclosure at least three days before the closing date. This document outlines all of the details of your loan, including the interest rate, monthly payments, and closing costs. Review it carefully and ask your lender or attorney if you have any questions.
Conduct a final walkthrough: Before closing, you'll have the opportunity to do a final walkthrough of the property to ensure it is in the same condition as when you agreed to buy it.
Sign the paperwork: At the closing, you'll sign a variety of documents, including the mortgage note, the deed of trust, and the bill of sale. You'll also need to provide proof of insurance and a government-issued photo ID.
Pay closing costs: You'll be responsible for paying closing costs, which typically include fees for the title search, title insurance, and attorney services.
Receive the keys: Once all the documents are signed and the funds have been exchanged, you'll receive the keys to your new home!
How much will closing cost?
Closing costs in Illinois, Pennsylvania, and New Jersey can vary depending on the price of the home and the location. On average, homebuyers can expect to pay between 2% to 5% of the home's purchase price in closing costs. For example, if you buy a home for $250,000, your closing costs could range from $5,000 to $12,500.
Closing costs may include:
Title search and insurance fees
Appraisal fees
Loan origination fees
Prepaid taxes and insurance
Attorney fees
Recording fees
The closing process is a crucial part of the home buying process, and it's important to understand what to expect as a homebuyer. By working with a reputable title company or attorney, you can ensure that the closing process runs smoothly and that you are well-informed throughout the process.
