Closing on Your Home Loan2017-11-28T00:26:22+00:00

Closing on Your Home Loan

After your loan is approved, closing documents are prepared and provided to a title/escrow company. You will usually go to the title company’s office to sign the prepared documents. This signing is called the loan closing.
Your Closing Disclosure
What to Bring to Closing
What the Title Company Does
8 Fees to Expect at Closing

What is the Closing Disclosure (CD)?

The Closing Disclosure, or CD, outlines the details of a borrower’s home loan transaction. Prior to the implementation of the TILA/RESPA Integrated Disclosure (TRID) regulations in 2015, this information was found in the HUD-1 Settlement Statement and the final Truth-in-Lending disclosure. With TRID, these two forms are now combined into one form, the Closing Disclosure.

The intent of TRID is to make documents like the CD easier for borrowers to understand the details of their loan. The lender (Academy Mortgage) prepares and delivers the CD to the borrower, who must have at least three business days to review the CD, from the date of the borrower’s receipt of the CD to the date of the loan settlement (closing).

The Closing Disclosure is a five-page form:closing_disclosure_email

  • Page 1 lists the loan terms, projected payments, and costs at closing.
  • Page 2 lists the closing costs in detail and identifies who is paying for
  • the charges.
  • Page 3 calculates the cost to close and provides a summary of the transaction.
  • Page 4 discloses loan features, such as assumption, late payment, and escrow account information, and, if applicable, describes terms pertaining to adjustable-rate mortgages (ARMs).
  • Page 5 includes loan calculations, other disclosures, and contact information for the lender, real estate professionals, and settlement agent.

What You Will Need to Bring to Closing:
  • One valid form of identification (a driver’s license, current passport, etc.) and one additional form of identification (membership card, school ID, etc.) so your identity can be verified by the notary public.
  • A cashier’s check or wire to the settlement agent for the funds required to close the loan.
  • Any additional documentation needed by Academy Team 101.

Prior to the appointment, you will be notified by the title company and/or your Academy Team 101 Loan Officer of the amount of funds required for closing. In addition, federal law mandates that you have at least three business days from the time of receipt to loan settlement to review your loan’s Closing Disclosure (CD), which details the conditions, costs, and features of your loan.

What the Title Company Does

Generally speaking, a title or escrow company provides the following services:

  • Conducts a title search and provides a title report.
  • Requests a title insurance policy.
  • Calculates interest on payoffs for outstanding liens.
  • Pays off existing loans when necessary.
  • Adjusts taxes between the seller and buyer.
  • Verifies your homeowner’s insurance policy with your insurance agent.
  • Provides prepared closing documents for the seller and buyer to sign.
  • Records the security documents and any other necessary documents.
  • Distributes all signed documents to each involved party.
  • Collects and disburses the loan proceeds.

8 Fees to Expect at Closing

It is important for you to be aware of these common closing costs so there are no surprises on closing day:

  • PROPERTY TAXES. Based on the month you close, property taxes will be pro-rated between you and the seller.
  • HOMEOWNER’S INSURANCE. You will be required to pay an entire year’s homeowner’s insurance (hazard insurance) premium at closing.
  • PREPAID INTEREST. Depending on the day of the month your loan closes, this charge may vary from a full month’s interest to just a few days’ interest.
  • PRIVATE MORTGAGE INSURANCE (PMI). Depending on the amount of your down payment, you may be required to put a certain amount for PMI into an escrow account.
  • TITLE INSURANCE FEES. These fees cover both the buyer’s title policy and the lender’s title policy. The title company may also charge fees for a title search, settlement/closing fees, recording fees, notary fees, document preparation, and title examination.
  • ADMINISTRATIVE, LOAN PROCESSING, AND UNDERWRITING FEES. These fees offset the cost of processing your loan request, obtaining all the necessary documentation, and evaluating your loan application package.

Other costs that you should be familiar with but do not apply in all cases:

  • LOAN ORIGINATION FEE. This fee covers the lender’s administrative costs in establishing the new loan. It is generally expressed as a percentage of the loan amount.
  • LOAN DISCOUNT. Often called “points,” a loan discount is a charge used to allow a lower interest rate than the current market rate. One point is equal to 1% of the loan amount.

Please contact Academy Mortgage Team 101 with any questions or concerns.