What Happens After You’re Clear to Close?

“Clear to close” signifies the lender’s final approval of a mortgage loan. This status indicates all lender conditions and requirements have been satisfied, and the loan is prepared for funding. It serves as a definitive green light, signaling the home purchase is nearing completion. This approval means the lender has reviewed financial documentation and verified creditworthiness.

Final Preparations Before Closing

Upon receiving “clear to close” status, several crucial steps remain before homeownership. First, review the Closing Disclosure (CD), a document outlining finalized loan terms, costs, and credits. Lenders must provide this document at least three business days before closing, allowing time to compare it against the initial Loan Estimate for discrepancies.

The final walkthrough, typically 24 to 48 hours before closing, verifies the property is in agreed-upon condition, repairs are complete, and no new damage exists. During this, test appliances, check all systems like HVAC, plumbing, and electrical, and ensure all included items are present. This is the buyer’s last opportunity to inspect the home’s condition before taking ownership.

Arrange funds for the down payment and remaining closing costs. These funds are commonly transferred via wire transfer or cashier’s check. Verify wiring instructions directly with the closing agent or title company through a confirmed, independent source to prevent wire fraud. Ensure your homeowner’s insurance policy is active and the insurance binder, temporary proof of coverage, has been sent to both the lender and the closing agent. Lenders require this binder before closing to protect their investment.

Contact local utility companies (electricity, water, gas, internet) to initiate service transfer or setup in your name, effective on the closing date. Do this two to three weeks before closing to avoid service interruptions. Reconfirm the exact date, time, location, and required forms of identification for the final signing.

The Closing Day Experience

Closing day culminates the home-buying process, bringing together various parties to finalize the transaction. Attendees typically include the buyer(s), seller(s) or their representatives, real estate agents, and a closing agent or attorney. A lender representative may also attend.

During closing, numerous legal documents are signed. Buyers sign the Promissory Note, their formal promise to repay the mortgage loan, detailing the amount, interest rate, and payment schedule. The Mortgage or Deed of Trust secures the loan against the property, giving the lender the right to foreclose if loan terms are not met. The seller signs the Deed, legally transferring property ownership to the buyer. These documents are often notarized, confirming identities and authenticity of signatures.

Following the signing, the final exchange of funds takes place. The buyer’s remaining funds (down payment, closing costs) are disbursed, and the lender’s loan funds are transferred. This ensures the seller receives proceeds and other parties are paid for their services.

Once all documents are signed and funds disbursed, the keys to the new home are officially handed over. This often occurs at the closing table, though a brief delay for funding confirmation can happen. After signing, the Deed is sent to the local county or municipal office for official recording. This process updates public records to reflect new ownership, solidifying the buyer’s legal claim. Recording typically takes a few hours to several weeks.

Immediate Post-Closing Actions

After closing and securing property possession, several immediate actions are advisable for the new homeowner. For security, change all exterior door locks as soon as possible. This ensures previous owners, or anyone with old keys, no longer have access. Rekeying, which changes the internal pins of existing locks, is a more affordable option than replacing entire lock sets.

Update your new address with various entities. Notify the U.S. Postal Service (USPS) for mail forwarding, update Department of Motor Vehicles (DMV) records, and inform banks, credit card companies, employers, and other essential contacts. Confirm all utilities (electricity, water, gas, internet) are correctly transferred and active in your name.

Establish a secure system for storing important closing documents. Key documents like the deed, mortgage or deed of trust, and the final Closing Disclosure should be kept in a safe and accessible location. These documents contain vital information regarding the property, loan terms, and potential tax implications.

Understand future financial obligations related to the new home. Property taxes are often handled through a lender-managed escrow account, where a portion of the monthly mortgage payment is set aside for taxes and insurance. Note the due date for your first mortgage payment, which typically begins the month after closing.