Closing Frequently Asked Questions
How and when do I make my first payment?
Your first payment date is noted on a few different documents in your closing package. At closing one of the documents you will sign is titled “First Payment Letter”. This document will contain all the information you will need to make your initial payment, including the due date. Another resource would be to email firstname.lastname@example.org – it is recommended to include your loan number in the subject line of your email.
When will my loan fund?
Once you finish signing all of your closing documents and the Closing Agent or Attorney finishes all of their tasks, your loan will fund and disburse. For owner occupied refinances, there is a three-day rescission period from the time you sign your closing documents until the loan funds. This is typically the fourth business day (Saturdays included, federal holidays excluded) following your signing date.
Who contacts me when docs are ready for me to sign?
The Closing Agent or Attorney will schedule your closing. If your loan is eligible for eClosing, you will receive closing documents electronically; these documents will be delivered to you via email prior to the physical loan signing. Not all states allow all loan documents to be eSigned. If your state does not allow for all documents to be eSigned, generally you will sign any documents that must be notarized or recorded in person, and all other documents electronically.
What should I bring to my loan signing?
Anyone on the loan should attend, unless a Power of Attorney has been approved and will be utilized, and your driver’s license, state-issued ID, or passport (unexpired), with a photo so that we can verify your identity. Also, any original documentation or conditions that has been requested by the underwriter.
Who will be at the closing?
Your loan officer will be there, as well as the sellers, buyers, and real estate agents that are also involved in the transaction.
What is a Closing Disclosure?
A Closing Disclosure (CD) is a preliminary final accounting of your loan’s interest rate, closing costs, monthly mortgage payment, finance charges, etc. The CD is used hand-in-hand with the initial Loan Estimate (LE) and shows you how the final charges compare to the initial estimated charges.
Can closing costs change after the initial Closing Disclosure (CD)?
Your initial CD will summarize your final figures, however there can be small last-minute changes to the final figures as the lender and the title or settlement agent balance figures with each other.
What are the closing costs going towards?
Your closing costs are based on your Loan Costs as well as a few other costs, some which may apply to you and some which won’t. The Loan Costs consist of origination fees or discount points, application, processing and underwriting fees, as well as fees for services that were performed during the loan process by third parties, such as appraisers or title companies. Lastly, there can be local or state government fees for taxes or recording.
What happens once I sign the Closing Disclosure?
Once you sign the Closing Disclosure, your mortgage paperwork will be prepared and all involved parties should prepare for the loan to close in 3 business days at the earliest.
Do I need to sign the closing documents with my middle initial?
We ask that you sign the closing documents as your name appears on the documents.
Can we esign our closing documents?
If allowed, based on your state and your loan program, we will send some or all of your closing documents for electronic signatures, as long as we have your email and your econsent.
What is a Loan Estimate?
A loan estimate is sent to you 3 days after you applied for your mortgage and is an initial estimate of your loan closing costs, prepaids, interest rate and APR, monthly payment, and any cash due from or to you at closing. Later in the process, you can compare this document to your Closing Disclosure (CD) to find any disparities.
Is my rate fixed?
Once your interest is locked, you will be provided with a Loan Estimate showing the interest rate and loan program. Take a look at the top right corner of the Loan Estimate, this is where you will find a description of your loan details.
How am I expected to pay the cash required at closing?
Your cash required for closing can be paid either by a cashier’s check from your bank or wire money directly to the title company. Any amount over $10k will need to be wired. If you’re unsure of where to send it, contact your closing attorney directly. ***CRITICAL: DO NOT accept wiring instructions via email. ALWAYS confirm by calling the title or settlement agent. Unfortunately, there are scammers out there who will try to take advantage of this process.***
How will I know when the deed is recorded?
You will get a copy from the closing attorney once it’s been recorded. You can also check online with your county Register of Deeds.
Will my loan be sold?
It is customary that loans are sold in the secondary market and/or there is a transfer of servicing rights. If your loan is sold, we’ll mail you a notice of the transfer of servicing. If you do receive this notice, make sure to confirm that you also received a similar notice from the new servicer confirming the transfer. We also recommend that you give your Loan Officer a call to confirm the transfer of servicing, as scammers can use a fake transfer of service notice to gain access to your financial information.
When do I get to see the final numbers for what I need to bring to closing?
You will receive an Initial Closing Disclosure (CD) 3 business days prior to closing (note – Saturdays are included as business days). Your initial CD can still be tweaked prior to closing, as we will be balancing with the title company and send you a final CD the day before closing. Usually any discrepancies from your initial CD to your final CD are very small and can be paid with a personal check if additional money is owed. If you are owed money, the title or settlement agent will give you a check for that difference.
Why do I have a 3-day rescission (aka “right to cancel” period)? What does that mean?
This applies to owner occupied refinance transactions, this gives you three days to analyze the loan documents you executed and make sure you are making the best financial decision, if not, you legally have three days to cancel. The rescission period requirement is required by all government lending agencies on owner occupied refinance transactions.
Are we cleared to close now that the Closing Disclosure (CD) is out?
Not necessarily. Once your loan is cleared to close, we will be the first to let you know. The initial CD being sent out indicates that the finish line is near. Continue to monitor the email communication from us to confirm that your loan has been fully approved, and thus “cleared to close.”
How does an escrow account work?
An escrow account is like a savings account that is held and managed by your mortgage servicer. A portion of each mortgage payment, as shown on your Closing Disclosure or First Payment Letter, is deposited into your escrow account to pay estimated real estate taxes and insurance premiums.
Will I get the keys to my new home at closing?
We do not control the process of getting keys, this is something to discuss with your Real Estate Agent and the Closing Agent or Attorney, but you should get your keys once your loan is funded and disbursed.
Will my payment ever change?
If you have an ARM loan, your monthly mortgage payment amount may change. If you have a fixed rate loan, the principal and interest portion of your monthly payment cannot change. Keep in mind however, if you have an escrow account setup for taxes and insurance, any fluctuations in those amounts can change your total monthly payment (PITI).
Will I get a copy of my neighborhood Covenants and Restrictions?
If they are not provided to you prior to the closing or included in the closing package, you can contact your HOA for a copy.
Why hasn’t my HOA been paid?
All HOA payments are paid by you directly, we do not make those payments on your behalf even if you have an escrow account set up.
What is the APR?
The APR is your mortgage interest rate plus other fees. Here is a great explanation from the CFPB: https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-mortgage-interest-rate-and-an-apr-en-135/