The closing – the last step before you take possession of your new home. As a first-time home buyer, or even as an experienced home buyer, the closing day can be both exciting and a bit apprehensive. That’s why it is important to know what you can expect at the closing, and the days leading up to it.
If you are purchasing a home with cash, you will need to hire a title company or an attorney to prepare all the necessary closing documents. If you are financing a home, your lender will choose the title company to represent them in the transaction. However, you may still be able to have a say in which title company is used. Just ask your lender if the title company you have in mind is one of their approved vendors. Whenever possible, I strongly recommend using a local title company when purchasing a New Hampshire property. They often have “gap” insurance which allows you to occupy the property immediately after signing, rather than waiting for the seller’s proceeds to clear or the deed to be recorded. If needed, I can provide you with several title company names so you can do your own research and choose the one that is right for you.
Once the title company is selected, they will perform a title search on the property to make sure you are able to purchase it free and clear of any liens or other title defects. The title company will also offer you the option of purchasing owner’s title insurance. When financing, it is important to remember that the lender will have title insurance. This only covers the bank’s investment in the property, so purchasing owner’s title insurance - to protect your investment in your property - is worth considering. The next thing the title company does is prepare all the legal documents that both the seller and you will need to sign. They will provide you with a final figure that will be due at closing. This amount is usually brought to the closing as a cashier’s check or wired to the title company in advance of the closing.
On the day of the closing, you will meet with the title company’s closing agent. The closing agent will explain each required document to you, so that you fully understand what you are signing. Prior to COVID-19, the buyer and seller usually met in the same room, at the same table. While traditional closing settings can still occur, your title company may offer you the option of a split closing (separate rooms or separate closing times) or the option of closing by mail. Make sure you discuss your needs and preferences with the title company in advance of the closing date.
Once the closing agent has verified the required funds have been received and all paperwork has been signed, their next step is to provide the lender with the mortgage documents (if applicable) and record the title with the registry of deeds. You now own your dream home and can take possession. Congratulations!