The Real Estate Loan Closing process has continued to get more complex over the course of time. At our firm, we do our best to simplify this process. But what exactly does the process consist of? Let’s get into it.

Contract is Signed

If this is a purchase or sale of a property, rather than a refinance, the process starts when you sign a contract to purchase a home. This contract will determine how long you have to get a loan commitment from a lender, what the purchase price is, when you get to inspect the home, and various other details of the purchase. But wait! Let’s back up.

If you’re a truly a savvy purchaser or seller, you’ve already engaged an attorney to review the contract prior to you signing it. It never hurts to engage an attorney early in the process, and it can be of significant help.

Now that you’ve had the proposed contract reviewed, negotiated any differences, and both parties have signed the contract, let’s move on.

The Loan Commitment

This document is issued by your lender and says basically that they are offering you a loan, along with details about that loan. In the case of a purchase, you’ll have to show this letter to the seller by a specific date. They’re going to want to know that you really can purchase the property. A commitment with conditions may be issued as well – this will specify that certain conditions must be met before the lender will commit to the loan. An attorney can assist in clearing these conditions.

The Closing

Whether this is a refinance or a purchase, a closing date will be set by you, in agreement with the lender and any other interested parties (such as your attorney). In Connecticut, it is standard practice for an attorney to conduct all closings, including refinance closings. Further, you are entitled to the attorney of your choice – you do not have to agree to the banks recommended attorney, if applicable.

At the closings, you will see a large number of documents. Don’t be scared away – your attorney will go through them with you one-by-one. These documents may be generated by your attorney (who is likely also your title agent), the bank, or any other interested party. Generally they cannot be negotiated at closing, so make sure you are aware of, and approve of, the important details such as interest rate and money due at closing.

Important Documents and Terms
Title Insurance
HUD-1 Settlement Statement
Note
Mortgage