What to know about real estate closings

On Behalf of | May 2, 2024 | Real estate law |

The real estate closing session is when ownership of an Idaho home is transferred to the buyer from the seller. It typically takes place a few weeks after an offer to purchase the home has been accepted. This is because a number of steps need to be completed such as inspecting the home and obtaining financing to follow through with the purchase.

You may need to write a check

Closing costs can range from 2% to 5% of the cost of the house, and any costs that are not rolled into your mortgage must be paid at closing. A large chunk of your closing expenses will come in the form of the down payment associated with your real estate transaction. The amount of your down payment as well as other costs should be outlined in the good faith estimate that you’ll receive in the days prior to closing.

You’ll sign a number of documents

During the closing session, you’ll be asked to sign both loan and purchase paperwork. The loan documents will outline its term, interest rate and monthly payment. It will also indicate how much was borrowed and whether there is a penalty for paying it back early. After signing loan documents, you are liable for making payments or risk foreclosure. Therefore, it’s important to ask any questions that you might have about your mortgage or the transaction in general before signing anything.

You’ll produce various documents

You’ll be asked to produce proof of homeowner’s insurance as well as a copy of the purchase contract at closing. You will also need to provide identification to confirm your identity before the real estate transaction can become official.

Buying a home can be an effective way to build wealth and put down roots in a community. However, it also creates a number of obligations that you’ll have to abide by over the course of several years or decades. Therefore, it’s important to prepare for a real estate closing to ensure that you understand what you’re agreeing to ahead of time.