Mortgage FAQs: The Closing
I have to attend closing? What are my options? It is not required that you attend the closing, if you've given an acceptable power of attorney or taken the necessary steps to complete a mail away closing. Your personal mortgage processor can help determine your options based on your needs.
Where do I go to close the loan? In most cases, you will go to a local Title Company or attorney's office for the closing. If you let us select the closing agent for you, we will work with our network and try to find an agent within 15 minutes of the property. The closing agent will have all your mortgage documents needed for closing. You may need to bring money, picture identification, etc. Your closing agent will let you know what you need to bring.
Can I bring a personal check to the closing? You will need a cashier's check or certified check for closing. Since this is such a large transaction, a cashier's check provides verification that the funds are actually available.
What is title insurance and why is it required? Title insurance protects the lender or you against losses from disputes over the title of a property. It ensures against the possibility that there may be an unknown lien or any discrepancies in ownership. You may want to consider purchasing a separate buyer's policy to protect your interests.
How much title insurance do I need? The amount of title insurance needed is based on the value of your home and the amount of your mortgage. Lenders are covered for the full value of the mortgage. This policy is required and will vary from state to state. There is a one-time fee for the policy that you pay at closing. In addition, you can obtain a separate owner's insurance policy to cover the full value of your home. However, this additional policy is not required.
How much homeowner's insurance does a lender require? Your homeowner's insurance policy must cover the cost to rebuild the home. The insured amount may be higher or lower than the actual purchase price as long as it meets the program requirements. The insurance company you choose can give you an actual quote based on specific information about the property.
How do I know if I need flood insurance? Your mortgage company will perform a flood hazard determination for your property. If your home is located in a Special Flood Hazard Area, federal law requires you to purchase flood insurance. Most standard homeowner's insurance policies do not cover loss due to flood. If you choose, you can obtain flood insurance coverage even if you are not required to do so by the lender.
How are my property tax bills paid? It depends on your loan program and state requirements. Generally, if your monthly mortgage payment includes money for property taxes, these funds are held in escrow by the lender and the lender pays your property taxes as they become due. Generally, if your payment does not include property taxes, you are responsible for paying them by the due date mandated by your state.
What type of inspections do I need before I close on my home? Certain inspections may be required under your particular loan program. However, depending on the home and the location, there are a variety of inspections you may want to consider before you close on your new home even if they are not required under your program, such as: