Understanding the Purchase Contract

The Closing
The closing is the final step to buying a home. The meeting generally takes about an hour and is held at the title company office as specified on your contract.

To obtain a final listing of the costs of the mortgage transaction, you should request a HUD-1 Settlement Statement from your title agent at the title company. The HUD-1 Settlement Statement is a final listing of the costs of the mortgage transaction. It provides the sales price, down payment, and the total settlement costs required from the buyer and seller.

Important note:
To cover the closing costs and the balance of funds due, you must use a certified check or cashier's check made out to the title company or a wire transfer.

The closing agent will receive a check from the lender that covers the mortgage. If your annual homeowner insurance and property taxes are included in your mortgage payment, your lender will set up an escrow account. This escrow account is is similar to a bank account in which the lender holds your money until it is time to pay the real estate taxes and insurance. After you sign the documents, the title agent officially will record the mortgage and deed at your local government's recording clerk office. The title agent will also distribute the required funds to the other parties, such as the seller of the home, the real estate agents, the lender and the homeowner insurance company.

It is important to to review the payment letter in your closing documents that tell you where your first payment should be sent.