The lender will disclose the mortgage’s terms, including the interest rate, monthly payments, closing costs, and other fees. If the seller covering closing costs, the underwriter will make a note of the responsible party.

Closing costs for buyer are due at signing. As the buyer, you should prepare a check, wire transfer, or other payment type. Ask the lender and title company about acceptable payment methods if an officer has not yet told you a few days before closing.

What to Expect on Closing Day
closing day
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The average closing costs for buyers include:

  • The down payment
  • Title insurance coverage
  • Loan application fee
  • Loan origination fee for processing the application
  • A year’s worth of homeowners insurance fees 
  • Home inspection fees, if not part of the prepaid closing costs
  • Closing day fees

You should also come prepared with a form of identification, proof of homeowners insurance, and a copy of your closing disclosure statement to compare to the final. You should also bring contact information if your real estate agent, lawyer, or another important person will not be present at the signing.

As the buyer’s down payment processes, the closing agents will review a pile of legal documents both parties must sign. The buyer will have additional paperwork if they are borrowing money to finance the sale. Some of these documents include:

  • The promissory note states the loan’s repayment terms. The buyer will need to sign this as an agreement to repay the loan. 
  • The mortgage note outlines the financial terms, such as the down payment and total loan amount. 
  • The escrow disclosure about the account and how much the borrower will need to pay each month to balance expenses like taxes and homeowners insurance.
  • The deed of trust or security instrument is an agreement that the lender will foreclose should the borrower stop making payments. 

As the seller, you will also be responsible for paying closing costs on or shortly after signing the paperwork. Real estate agents’ commission payments are the most common seller closing costs. Real estate commissions vary but can be five to six percent of the purchase price. 

You might pay guaranteed rate closing costs if one or both parties used real estate lawyers instead of agents. Real estate lawyers have some of the lowest closing costs since they only handle legal paperwork and do not show homes. 

At the end of the one-to-two-hour meeting, the property’s title is in the buyer’s name. The seller hands the keys, garage door, openers, and any other important home-related objects to the buyer. The seller becomes the former owner, and the buyer is now the new homeowner. 

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