Patel & Dalrymple, PLLC June 1, 2018

Buying a new Virginia home likely is one of the most exciting events in the lives of you and your family. So far, everything has gone really well. You found your perfect house and made an offer on it that the seller accepted. Now all that stands in the way of your moving day is the real estate closing. If this is your first home-buying experience, you may be nervous about the closing and wondering exactly what will happen. Try not to worry. Your real estate closing is simply the final step of the process that transfers legal ownership of the home from the seller to you.

The first thing you will do at your closing is sign numerous documents. In addition, other important transactions will take place, including the following:

  • You will present your escrow agent with a cashier’s check for the amount of your closing costs.

  • Your mortgage lender will present your escrow agent with a check for the amount of your mortgage, assuming that important detail has not already happened.

  • Your escrow agent will present a check to the seller for whatever amount (s)he is entitled to receive.

  • Now comes the fun part. The seller will sign the property deed that gives you legal title to your new home. (S)he also will give you a set of keys to it if you do not already have a set.

  • Your title company representative will take the deed and properly register it in the Recorder of Deeds’ office before returning it to you.

Your Closing Costs

Usually at least 30 days elapse between the date of your purchase offer and the date of your closing. This is your escrow period, and a lot of things happen during it for which you accumulate fees and costs. These are your closing costs and generally amount to roughly 3 percent of your mortgage loan amount.

Your mortgage lender will give you an estimate of these costs within three days of your loan application date. This is your Good Faith Estimate that gives you a good idea of how much your closing costs ultimately will amount to. Your lender then will give you a subsequent document, a HUD-1 Settlement Statement, a few days before your closing date that lists and totals the actual amount of your closing costs. This is the amount for which you must obtain a cashier’s check.

Cash Reserves

Be aware that most mortgage lenders require you to have cash reserves, i.e., additional money, in the bank above and beyond your down payment and closing costs. When you go mortgage shopping, be sure to establish each company’s cash reserve requirements. They can vary from lender to lender, but generally range from amounts equivalent to one mortgage payment to as many as six such payments.

And there you are. You did it! You and your family will now move into the home of your dreams. Congratulations!