STEP 5 – CROSSING YOUR OWN GOLDEN GATE BRIDGE
November 19th, 2008 categories: Buyer Strategies, Mortgage & Finance
[NOTE: Rob Martinson continues his series on getting the home mortgage process right for home buyers in Northern Virginia. His previous installments are in our Mortgage & Finance archive.]
For many of you, particularly the first-time homebuyers out there, this will be one of the biggest steps of your life. The days of dumping money down the proverbial hole that is rent are about to be over (at least for the foreseeable future). You will now be able to enjoy the main fruits of home-ownership. You want to paint the walls green? Paint them green! Have a picture to hang? Put a hole in whatever wall you please! And did somebody say tax benefits!? When I saw my tax return this year, I know I did. OK, I think you are ready. Now let’s cross your own Golder Gate Bridge and get you into that house.
A few days before settlement your loan officer will ask his closing department to send closing instructions and documents to the title company. (Again, in the DC area the title company will play the dual role of making sure the title to your property is free and clear and also will act as settlement agent. We are concerned more with their second role in this step). The title company will take the closing instructions and create a HUD-1 form. A uniform document created by the Department of Housing and Urban Development (from which the name derives), this form can be found in every real estate transaction in every state in the country.
The HUD-1 will document where every penny in the transaction is going. You will see how much comes from or goes to you, the seller, the title company, taxes, and to your bank, as well as to any other third party sources. A good loan officer/title company combination will usually ensure this is out to you around 48 hours prior to closing. Now if there are circumstances beyond their control, it can be impossible to hold them to that, but ideally you want to have time to review the HUD-1 before sitting down at the settlement table. If something is wrong, ask about it. Until you sign it, nothing is final!
When the day of settlement arrives, you will sit down with your Realtor®, the seller(s), their Realtor®, and the settlement agent from the title company. Note that the loan officer is not required to attend settlement, but a good one will also want to be there to ensure that all loan documents are correct. Once everybody agrees on and signs the HUD-1, the seller will sign the deed over to you. Congratulations! You now own a home. Unfortunately you are now also about to own a mortgage as well, or should I say owe? The bank will ask the title company to have you sign a deed of trust forever recording your debt on the public record until you have paid it off. Upon signing that and a bunch of other lender required documents, it is time for you to call in the moving vans. You’re done!
When you leave settlement, you will have a lot of paper, some keys, and hopefully a big smile on your face. It seems a bit overwhelming at first to know you just bought the most expensive thing you have ever bought, but trust me, the butterflies will go away. Hopefully your new home will bring you comfort and a sense of pride. I know it did for me.
So I suppose the next thing to discuss here now that you own your home and owe on a mortgage is how this whole refinance game works. Fortunately, since you have been through most of the process, it won’t be necessary to devote an entire series to the concept. But we will give you important insights on this next time around.
You can contact Robert at Robert.a.martinson@bankofamerica.com]
