The meeting between the home buyer, seller and lender where the property and funds legally change hands. Also referred to as Closing.
A home purchase is not finalized until settlement. That is, the meeting between the buyer, seller, and lender where the property and funds legally change hands. Settlement is also known as closing.
Knowing what to expect at settlement can make the process go more smoothly for you. First and foremost, settlement involves a lot of paperwork. You sign a settlement sheet, which explains where all of the money is going. You also sign the mortgage note, the Truth-in-Lending document, and any other documents required by your state’s laws. Signing all of the documents takes care of the legal aspect of settlement.
This meeting is also when the money is also transferred to finalize the home purchase. This is done with a cashier’s check. The lender will let you know the amount that you need to bring to settlement. The amount covers your down payment and any closing costs.
Closing costs comprise a variety of expenses including the appraisal and attorney fees, homeowners insurance, and any points that you purchased. The lender lets you know approximately what the closing costs will be through a good faith estimate prior to settlement.
The final step in settlement is getting the keys. At that point, you are the official homeowner. While you use those keys and move in, all of your documents are filed at the appropriate places to ensure that the transfer is complete and successful.