Closing (6 weeks from accepted offer)
Your closing date is established in your Offer to Purchase and that date will stay the same unless there is an extension negotiated between you and the seller. It will typically be about 60 days from the date the offer is accepted, but it can be negotiated to be earlier or later at the time of the offer. Your loan officer, agent, and attorney will coordinate a time and location for the closing, typically at your county’s registry of deeds or the attorney’s office. Keep in mind that after your closing you need to file your documentation at the registry of deeds before you can get the keys to your new home.
Before you close, your attorney will do a title search. They are checking to make sure that the title of the property you are buying is clean. This means that there are no liens on the home, the mortgage was discharged properly every time the property was sold, there are no previous heirs to the property who may still claim ownership, etc. If the attorney finds that the title is clean, the process will move forward to the closing. If there are any title defects it will be the seller’s responsibility to resolve the issue.
As the owner of a property you have the ability to purchase an Owner’s Title Insurance policy. This will protect you if any title defects come up when you go to sell the home and if any other issues regarding the past ownership of the property come up while you live there.
Three business days before your closing your loan officer will issue you a Closing Disclosure. This is an update of your Loan Estimate and will tell you exactly what your closing costs are and the amount of money that you need to bring to the closing. It will also list all of the costs the seller is responsible to pay. If you are doing a wire transfer you will set that up with your attorney and loan officer. If you are asked to bring a check, it must be a certified bank check. You will want to get it made out to yourself just in case something happens that causes the closing to be pushed back or if the deal falls through. At the closing you will sign the check over to the attorney, who collects all of the money and disburses it appropriately.
You can expect your attorney, real estate agent, and loan officer to be at the closing. The seller may or may not be there, but their attorney will always be there. Your attorney should be able to answer your questions during the closing when you are signing several documents. In addition to the HUD-1, you will receive the Note, which holds you accountable for repaying the loan, and the Mortgage, which establishes the property as collateral if you default on the Note.
There are certain issues that can potentially delay the closing or even the derail the entire sale. Make sure you are familiar with what they are and how to handle them.
In Massachusetts you are automatically covered up to $125,000 in equity to protect the value of your home against creditors or anyone else who may be going after your assets as part of a lawsuit. If the home you are purchasing is going to be your primary residence, you can file for Homestead, which increases the protected equity in your home to $500,000. The most this should cost you is a $35 filing fee with the registry of deeds. Many attorneys, however, will offer to fill it out for you for an additional fee. If your attorney is willing to fill it out for free, you might as well have them do it. If they charge a fee, print the form from your county’s registry of deed’s website and fill it out yourself. Note that you will need to get it notarized.