What Comes After the Closing Disclosure?

The Closing Disclosure (CD) is a final, comprehensive statement of all loan terms and closing costs in a real estate transaction. This five-page document details your mortgage, including interest rate, monthly payments, and associated fees. Receiving the CD means your home purchase is nearing completion, allowing you to review financial details before finalizing the transaction. It ensures transparency, allowing borrowers to understand their commitment and compare final terms against earlier estimates.

Reviewing Your Closing Disclosure

A mandatory three-business-day waiting period begins upon receiving your Closing Disclosure before you can close on your mortgage loan. This period allows for thorough review, enabling you to compare finalized terms and costs with your initial Loan Estimate. This comparison helps identify discrepancies or unexpected changes.

Carefully scrutinize several sections of the Closing Disclosure. The “Loan Terms” section outlines the loan amount, interest rate, monthly principal and interest payment, and any adjustable-rate features or prepayment penalties. The “Projected Payments” section breaks down anticipated monthly housing expenses, including principal, interest, mortgage insurance, and estimated escrow for property taxes and homeowner’s insurance.

The “Costs at Closing” section details all transaction fees and charges, categorized into loan costs and other costs, determining the “Cash to Close” amount. Loan costs include origination, appraisal, and credit report fees. Other costs may encompass recording fees, transfer taxes, and title insurance premiums. Verify that all credits, such as earnest money deposits or seller credits, have been accurately applied.

Comparing the Closing Disclosure line-by-line with your Loan Estimate is important. While minor variations are permissible, increases in certain fees might require clarification. If you discover errors, inconsistencies, or unexpected charges, immediately contact your lender, escrow officer, or real estate agent. Addressing discrepancies before closing avoids potential issues and ensures terms align with your understanding.

Preparing for the Closing Day

Before the scheduled closing meeting, several actions and checks are necessary for a smooth transaction. The final walk-through of the property is typically conducted within a few days or hours before closing. This walk-through verifies the property is in the agreed-upon condition, all repairs are completed, and no damage has occurred since your previous visit. Confirm that all items included in the sale, such as appliances or fixtures, are present and in working order.

Securing funds for closing is another preparation. Your Closing Disclosure specifies the “Cash to Close” amount. These funds are typically required via wire transfer or cashier’s check. If opting for a wire transfer, verify instructions directly with the title company or closing agent through a confirmed phone number, not solely via email, to prevent wire fraud. Scammers often attempt to intercept communications and provide fraudulent wiring instructions.

Lenders require proof of homeowner’s insurance. You must have an active policy and provide a declarations page as evidence of coverage before closing. This insurance protects the property and the lender’s investment. All parties signing documents at closing must bring valid government-issued photo identification, such as a driver’s license or passport. Some closing agents may require a second form of identification as well.

Ensure all outstanding contingencies in the purchase agreement, such as appraisal, inspection, or loan approval, have been met and documented. For sellers, preparations involve vacating the property, ensuring it is clean, and leaving items specified in the contract. Sellers are typically expected to have moved all personal belongings out of the property.

Understanding the Closing Day

Closing day marks the official transfer of property ownership and finalization of the mortgage loan. Attendees typically include the buyer and seller (who may pre-sign documents), their real estate agents, the loan officer, and a closing agent or title company representative. In some instances, attorneys for either party or the lender may also be present.

During the meeting, you will sign many legal documents. These documents include the deed, which transfers ownership, and the promissory note, your promise to repay the mortgage loan. You will also sign the mortgage or deed of trust, which secures the promissory note with the property. Signing these documents signifies your agreement to loan terms and acceptance of property ownership.

Funds are exchanged on closing day. The buyer’s down payment and closing costs are collected, and the lender disburses loan funds. The closing agent distributes these funds to pay off the seller’s mortgage, cover closing costs for both parties, and disburse remaining sale proceeds to the seller. This process ensures all financial obligations are met.

A symbolic or actual exchange of keys often takes place at closing, signifying the buyer’s possession of the property. Following the meeting, the closing agent sends the deed and other documents to the county recorder’s office. This recording process updates public records to reflect new ownership, making the transfer legally complete.

Actions After Closing

After closing, new homeowners have several immediate responsibilities. A primary task involves transferring or setting up utility services such as electricity, water, gas, internet, and trash collection. This requires contacting each utility provider directly to ensure uninterrupted service.

Property taxes are an ongoing obligation, often handled through an escrow account managed by your mortgage lender. Funds for property taxes are collected with your monthly mortgage payment and held in this account until due. Understanding the tax payment schedule and how your escrow account functions is important for managing homeownership costs.

Updating your mailing address is another immediate action. File a permanent change of address request with the United States Postal Service (USPS) to ensure mail is forwarded to your new home. This can be done online for a small verification fee or in person at a local post office. Also update your address with banks, credit card companies, subscription services, and other entities.

Immediate home maintenance includes changing locks on all exterior doors for security, checking smoke and carbon monoxide detectors, and familiarizing yourself with the main water shut-off valve and electrical panel. While sellers are not responsible for repairs after closing unless there was fraud or an unfulfilled contractual obligation, buyers should be prepared for minor issues. Securely store all closing documents, including the Closing Disclosure, deed, and loan agreements, as these are legal and financial records.

For sellers, post-closing actions include setting up mail forwarding with the USPS to redirect mail from the sold property. Sellers also need to arrange for final utility readings and service disconnection. The closing agent typically disburses sale proceeds after deductions for outstanding mortgage balances, closing costs, and real estate commissions. Sellers usually receive funds within 24 to 48 hours after closing, via wire transfer or cashier’s check; timing can vary.