Mortgage Help   Mortgage Rates Real Estate Credit Foreclosure Tax Mortgage Rates  Mortgage Basics Chapter 1: How much house can you afford? Homeownership Should You Buy or Rent Summary   Chapter 2: Adjustable-rate mortgages ARM and a fixed-rate mortgage Fixed-rate mortgages Understanding the key elements Which type of lender is right for you? Other types of mortgages Subprime Summary   Chapter 3: Your credit score Down Payment How lenders set rates Low down payments Mortgage insurance Your mortgage payment Mortgage Points Summary   Chapter 4: The good faith estimate Inspection and Insurance Necessary paperwork for a buyer Other lender paperwork Paperwork and fees Prequalification and preapproval Special circumstances Summary   Chapter 5: Ten questions to ask Turned down for a mortgage Underwriting What lenders ask Summary   Chapter 6:  Understanding the closing process Escrow Summary   Chapter 7: When your mortgage is sold Avoiding foreclosure Paying ahead Payment changes Refinancing Removing mortgage insurance Summary Closing: Understanding the closing process It's finally here - closing day. This is the day that the parties will sign the papers that officially transfer the ownership of the property to you. This is the last chance you have to make any changes to the transaction. The day before closing, you should gather all of the paperwork that you have received throughout the process, including: the good faith estimate, contract, proof of title search and insurance, flood certification, proof of homeowners' insurance and mortgage insurance, home appraisal report and inspection report. You may need to refer to these documents during the closing. Most purchase contracts allow you to walk-through the property within the 24 hours before closing. This lets you see if the property is vacated and in the condition specified in the purchase contract. If you find major problems during the walk-through, you can ask to delay the closing or have the seller deposit money into an escrow account to cover any repairs. At the closing, you will: 1. Sign legal documents. You will sign the agreements between you and your lender that lay out the terms and conditions of your mortgage. You will also sign the agreements between you and the seller that transfer the ownership of the property. You should read every document carefully. Do not sign anything you have not read or do not understand. You should also refrain from signing any document with a blank line or space. 2. Pay closing costs and escrow items Borrowers handle the closing costs in two ways. They either roll them into the principal balance of the new loan or agree to a higher interest rate in exchange for the lenders paying the costs. Some buyers simply pay the closing costs out of their own pockets. Who is present at the closing? Each state has different closing procedures, but the following parties usually attend the closing or settlement meeting: " The closing agent, who might be an employ of the lender or the title company. " Attorneys. Each side can have an attorney. The closing agent may also be an attorney. It is always a good idea to have an attorney who represents you and only you to help you decipher the paperwork before you sign it. " The title company representative who provides written evidence of the ownership of the property. " The seller. " The seller's real estate agent. " You, the buyer and mortgagor. " The lender, known as the mortgagee. The closing agent will conduct the meeting and make sure that all documents are signed and recorded. He or she will handle the payment of closing fees and escrow payments and their distribution to the appropriate parties. The closing documents You will receive the following documents at the closing: " The HUD-1 Settlement Statement. This is a detailed list of all costs related to the purchase of the home. It is similar to the good faith estimate, but it isn't an estimate. It is the precise costs that you will need to pay. Both you and the seller will sign it. You should compare the HUD-1 statement with the good faith estimate to see if there are any significant differences in costs. By law, you have the right to review the HUD-1 within the 24 hours before closing. Take this time to clear up any problems or mistakes. " Final TILA Statement. This is the final version of your Truth in Lending Act Statement. It will disclose the cost of your mortgage and the APR. It should also take into account any modifications made in regards to your interest rate and points. " Mortgage note. This document is basically the promissory note. It says you promise to repay the mortgage. It will state the terms and amount of the mortgage, and the consequences of defaulting on the loan. " Mortgage or deed of trust. This secures the note and gives the lender a lien against the home if you default on the terms of the mortgage note. " Certificate of occupancy. You will need this legal document before you can move into a newly constructed home. Once all the papers are read and signed, you will receive the keys to your new home.