Closing a Mortgage Is Like a Tennis Match

Closing an AZ Home Loan

AZ Home Loan Closing

Today’s mortgage / home buying process is comprised of several different steps a buyer must take in order to reach their ultimate goal – home ownership.  After a successful and complete mortgage approval, buyers are eager to leap across the finish line and snatch the keys to their new home.  Oftentimes buyers assume that once they have final home loan approval or once their Arizona mortgage lender sends loan documents to the title company that they have completed the home buying journey.

Not so fast!  While it is true that once a title company receives loan documents the end is near, it is equally true that there is still work to be done before the buyer can cross the picket fence finish line into their new home.  In addition, the Closing Process (the period of time between loan documents being delivered to the title company by the buyer’s mortgage company and the moment the transaction records and the buyer officially owns the home) has changed somewhat in recent years.   Let’s take  a look at what must be done to completely close on a home purchase:

Closing a Home Loan is Like a Tennis Match

Completely closing a home purchase is a lot like a good tennis match.  The ball (aka – buyer’s purchase) shifts from the lender’s side of the court back over to the Title Company’s and back several times after loan documents are emailed out by the buyer’s mortgage company.  Let’s take a look at what has to happen between loan document delivery to title and the buyer’s signing:

1. LENDER – Lender emails loan closing documents to Title
2. TITLE – Title Company downloads the documents and creates a Settlement Statement (aka – “HUD”)
3. LENDER – The Settlement Statement is then emailed over to the Lender for review and approval
4. TITLE – The buyer’s lender reviews the Settlement Statement and requests minor changes/edits be made by the Title Company
5. LENDER – The Settlement Statement is emailed back and forth a few times between Title and Lender until the buyer’s lender approves it
6. TITLE –  Once the Settlement Statement is approved by the buyer’s lender, the buyer signs the closing package with the Title Company

That must be it right?  Not quite.  Now that the buyer signs their closing document package, the next big step is to fund the buyer’s loan.  The tennis match continues:

1.  TITLE – Once the buyer signs, the Title Company then sends over a select group of documents taken from the stack of documents the buyer just finished signing – this select group is dictated by a checklist provided to Title by the lender.  The list outlines the lenders “funding requirements” or in other words what documents the lender must receive from Title prior funding the buyer’s loan.
2. LENDER – The buyer’s lender reviews the documents sent over by Title.  Typically the Title Company misses a few of the required documents on their first attempt.  The lender’s closing department (in charge of funding) will update the Title Company regarding what is missing/still required to fund the buyer’s loan.
3. LENDER – After a few rounds of communication between Title and the Lender’s closing department and once the buyer’s lender has everything they outlined on their funding requirements list, the lender releases the funds needed to fund the buyer’s loan and their new home purchase.

At this point we must be done right?  Close, but not quite yet.  Now that the buyer’s lender has funded and the Title Company has enough money to close the transaction there are a few final steps that must be taken to finish everything off:

1. TITLE – The Title Company takes all of the money they now have and disburses it to all the parties involved (sellers old mortgage company, the seller, insurance companies etc…)

2. COUNTY- Once funds have been disbursed the Title Company then submits a request to the County to record the transaction and make it official.  Once the County records the transaction is complete.

Finally, those shiny new keys may be tossed over from seller to buyer!  While this all may seem like a lot, these steps can all happen relatively quickly with the help of an efficient Title Company and a responsive Mortgage Lender.

If you have any questions on this or any other part of the home buying/home loan process please do not hesitate to call or email me.

By Jeremy House

 

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