The closing of your new custom home can be an exciting part of the building experience. Whether this is the first home you have owned, or the first custom home you have built the closing process can also, at times, seem overwhelming.
The first thing to know about the closing process has to do with the time the closing is scheduled. It is common for the closing to be delayed within a day or two of when it is originally scheduled. This does not always occur, but in the event it does, do not be alarmed or over concerned as it is possibly an easily explained situation.
A lot of work goes into closing a property and a lot of people are involved with making sure all of the paperwork is in line and your property is securely buttoned up and ready to hand over.
The closing process is sometimes called the settlement process and involves both buyers and sellers. In some cases all of the closing documents are signed with both parties present, however in some instances these papers may be signed at separate appointments.
While closing regulations may vary some among states or even county to county, most closings will contain a similar process. Initially, and several days up to 24 hours prior to signing all closing documents a group of people including closing agents, title companies, attorneys and lenders are all preparing paperwork which will be presented for your acknowledgement and acceptance.
Some of the documents being prepared include inspection reports, appraisals, title searches, and title insurance (if this was an option you selected); Homeowners insurance, mortgage insurance and in some areas a flood certification may be necessary.
At the closing itself a sea of papers will be quickly passed to you for your signatures.
These will include:
- Closing Documents: This will include mortgage loan details, loan terms and monthly required payments. You will also see closing costs within these documents. In some cases you may receive these documents 3 days prior to the actual closing date so you will have more time to review them.
- Mortgage Note: The mortgage note will include the promise to pay statements, payment terms and overall loan terms for the property. You will also find consequences and penalties should you fail to make payments.
- Mortgage or Deed of Trust: These documents offer security for each of the parties and allows the lender the claim to the property should the agreed upon loan terms not be met.
- Certificate of Occupancy: In the event you are purchasing a new construction project, this document will be required as legal proof to move into the new home. The CO, as it is sometimes referred to, will provide the documentation needed to verify that all building inspections have been passed and it is safe and legal to reside within the property.
This transfer of signatures secures all parties and gives way to ensure government taxes are collected and transfer of ownership, titles and loans are recorded. Regardless of how many properties you have closed on, it is always a good idea to review and read over the paperwork being presented for your signature(s). A few things to double check include actual sales price of the home, interest rates, closing costs (which typically shouldn’t vary more than 10% from the original good faith estimate), and prepayment penalties. This is your investment so do not feel rushed as you sign each of the legal documents required to properly close on the house.
For more information about this topic and how it applies to your new custom home contact us at AmericasHomePlace.com