Anatomy of A Florida Real Estate ClosingA real estate "closing" is when and where the keys and money are exchanged and the transaction is completed. The mortgage lender sends their loan documents to the closing agent along with their closing instructions, which set forth the conditions to close the loan. The closing agent gathers all of the necessary documentation from both the buyer and the seller, including a Deed, Affidavits and a Bill of Sale. The closing agent will ensure that all necessary papers are signed, witnessed, notarized and recorded and that the funds are disbursed to the seller, real estate agents, insurance companies and, in some instances, the lender. In general, the buyer is required to bring to the closing a certified bank check or by wire transfer. In many instances, the exact dollar amount necessary to close the transaction will be provided to the buyer the day before the closing, but that normally depends on when the bank provides its “numbers” to the closing agent. At the closing, the closing agent will explain each and every charge on the closing statement before any money is transferred and the transaction closes. Once the transaction closes, the closing agent will then send the Deed to recording in the Public records for the county in which the property is located. What Is The Settlement Statement (Commonly Known As A "Closing Statement" or "HUD-1")?This form is required by federal law and is produced by the closing agent. It is a statement that contains a complete breakdown and adjustments for all monies related to the sale for both the buyer and seller, including:
The HUD is signed by the buyer, seller and closing agent and becomes part of the loan file. Some of the expenses paid on the HUD-1, such as credit-reports and appraisal fees are sometimes shown as P.O.C. (Paid outside of closing). This means that those costs have been paid prior to the closing. Also on the HUD, is prepaid interest related to a mortgage. Prepaid interest is included because interest is paid in the arrears - meaning interest is due at the end of the period. At closing, the buyer pays interest from the date of settlement until the first day of the following month. This means that you first mortgage payment is usually due on the first day of the second month following the month of closing. Ex. If the closing occurs on February 2, then your first payment will be due on April 1.
You May Also Be Interested in These Popular Real Estate Closing Topics (Most requested real estate information by our clients): Frequently Asked Questions Regarding Real Estate Closings Real Estate Pre-Closing Checklist 3 Common Forms of Ownership of Florida Real Estate 3 Steps to Adding a Name to a Deed |
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