By Marina Locks

Jun 26, 2013

Closing Overview

Do you know what happens at closing? Closing is one of the final steps in the loan process. The closing on a loan is where all the necessary legal paperwork is presented and signed. At closing, the ownership of a property is transferred from the seller to the buyer. All funds are distributed by the title company/attorney, and the new deed and Security Instrument is sent for recording to the county clerk. A Security Instrument often called a Mortgage or Deed of Trust is Security of the Debt secured by the property. The Promissory Note is secured by the deed of Trust and is the evidence of the debt.

From a borrower’s perspective after closing, they begin making payments to their Lender based on the Terms of the Promissory Note that is signed at the time of the Loan Closing.  The promise to repay exists on every loan whether the borrower has purchased a new Home, Refinanced an existing property, or has taken out a Home Equity Loan or Line of Credit. The history of that repayment will determine the ability of future financial needs for the borrower. Should a borrower run into hardships that prevent timely repayment of their Loan, they should contact their existing servicer immediately for guidance.

At the closing table, a borrower will review the legal documents provided in the loan package and execute all required documents. A notary is present for this or an attorney if one is required by state law. This step is extremely important for the borrower as it is the final confirmation of the loan terms as discussed with their lender. Closing on a refinance typically takes the borrower about 30 minutes.

Closing Department at NFM Lending

The closing department at NFM Lending prepares the final legal documents a borrower will sign at closing. This department works with the Loan Originator, Loan Processor, Underwriter, Disclosure Desk, Compliance, and Title Company to ensure that all prior conditions of the loan are met and that closing can occur at the requested date and time. They review the file in its entirety for accuracy and to ensure that the loan conforms to all investor, state, federal, and company guidelines. Once the audit is complete, they send initial loan instructions to the selected title company so that they can prepare the final HUD-1 Settlement Statement. The HUD-1 Settlement statement reflects all costs associated with the loan and will provide the final amount of cash required from the borrower at closing or show cash to the borrower if applicable on the loan transaction.

When the Closer receives final HUD approval from the NFM Lending Sales Manager or Loan Originator, a final compliance check is run, and the complete legal loan package is released to title. A closer’s final audit of the loan file is very important as they are the last department who reviews the file for final validation of documents provided throughout the loan process and underwriting of the file. They work diligently internally to resolve any issues found with the appropriate party to avoid delays in closing so they can make the closing process seamless for the borrower.

To learn more about what happens at closing and other steps in the loan process, please contact one of our Licensed Mortgage Loan Originators by clicking here.

These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.