Step 5 - The Celebration and Final Questions
Everyone will be working on your behalf to get the closing for your dream home. You will be working with your lender to get the loan completed. The seller will be busy making sure all repairs are completed and checked. Meanwhile to escrow/title company will be getting all the title documents ready and coordinating with you, the seller, the lender to get everything ready for closing time.
You also will begin to make plans for moving. This includes making sure the post office, magazines, bills, family and friends know your new address. Utility companies - electric, gas, water, telephone, and cable need to be notified of turning off at your old address and turning on at your new address. School registration needs to be taken care of well in advance of the move too. Your home insurance needs to be updated for the need address too. Finally you'll need to prepare for the actual moving of furniture and personal items. Check out Moving Days for more help.
Finally the Celebration!
In Arizona the closing is done at the Escrow/Title Company Offices (out-of-town buyers will use Fed Ex for returning signed paperwork). The seller and buyer do not meet at the closing, each comes in separately and signs the required documents. Once the money is received from the lender, usually two days after signing, the title is recorded. Once this recording of the new owners on the deed is complete, the buyer is given the keys. This is the real closing day, this is when you can move in.
The most frequently asked questions about closing:
Q1. Do I get to see the calculations before I go to sign?
A1. You can be faxed an audit sheet beforehand. The realtor and the mortgage broker also will be glad to review this settlement statement with you. They can explain the calculations so that there is no surprise when you sign. You will be know the exact amount you need to wire or have a cashiers check.
Q2. What are the closing costs I will be paying?
A2. There are several different costs involved - Escrow Fees, Deed Recording Fee, Appraisal Fee, Lender's Fee, Pre-paid Interest, Property Taxes Impounds, Homeowner's Insurance and Impounds, and Title Policy Fee. The lender and others will discuss these costs with you.
Q3. Why am I paying Pre-paid Interest?
A3. Loans are usually due on the first day of the month, so depending on the day of the month you close you will be charged just for the days of the month you will own your home.
Q4. Why am I paying property tax impounds?
A4. You will be responsible for all property taxes from the closing date. The lender will take a certain amount in advance and then divide the amount due by 12 and collect the rest every month. The lender will pay the taxes for you every six months. The seller will also give the lender the amount he owes when he occupied the home, so you will not pay for his taxes.
Q5. Why am I paying homeowner's insurance and also an impound account?
A5. Homeowner's Insurance Annual cost is paid at closing or before. The lender also begins collecting this cost for next year, he will divide the cost by 12 and then you will send the lender this amount monthly. The lender will pay your Homeowner's Insurance next year from the money collected.
When all this is done you are ready to move.
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