10. Finish Line – Signing, Funding, and Recording
The Finish Line
Once you’ve signed your Closing Disclosure, you’re almost done.
You are able to sign your loan documents once 3 days has elapsed from the day that you acknowledge the closing disclosure.
The last responsibility you should have is to wire the funds to close to escrow.
Because this is a the home stretch, and there is so much at stake, it can be a very strenuous time for all parties involved.
The reality is, you wouldn’t have gotten this far if there was a question of your loan closing.
You’re at the finish line. This final step is short and sweet!
Sign Your Loan Documents
Once you sign your loan documents, the original documents need to be delivered back to the lender’s funding department.
Depending on what time of day, and where you signed your loan documents, you should allow 24 to 48 hours for the lender to receive the original documents.
Most lenders will begin the review process off of fax or digital copy of the loan documents.
Once the funder reviews all of the information in the file, they will sign off on the final conditions. To your loan officer and your real estate agent, these steps are called “Prior to Funding” conditions, or PTF conditions.
PTF conditions are primarily notary and escrow documentation if everything went smooth with the signing. This will probably happen two to three days from the day you signed, and it seems like three weeks. You’re almost there.
Funding Your Loan
Once all of your “prior to funding” conditions are cleared, the lender will set up the loan to fund. Most lenders will fund up to 1 pm PST / 4 pm EST.
Now, this is something to celebrate! The next, and final step is right around the corner.
Recording Your Deed of Trust
The final step is not a matter of someone making a decision to push a button, it’s whatever the recording rules are at the County Recorder.
When you record on the same day as the day that the escrow company receives the wire, it’s called a “Special Recording”.
Check with your loan officer and real estate agent to see if it’s possible to record special in your County. If you are not in a County that allows special recording, your Deed of Trust will record the following morning.
Once the Escrow confirms recording, funds will be dispersed to the seller, and you get your keys!
Your First Mortgage Payment
Your first mortgage payment will be due on the first of the month following the month that you close in. This is confusing for most people, so let me give you an example. Let’s say for example your loan records in October. Your first mortgage payment is due on December 1st, the first of the month following the month you closed – October is when you closed, November is the month after that, so December 1st is when the first payment is due. I know, it doesn’t make much sense, but that’s the way these things work…:)
You will receive a “welcome” letter from the lender with instructions for making your first payment. If you do not receive something from your lender within the first couple of weeks, reach out to your loan officer and have them follow up for you.
If you have your taxes and insurance included in your mortgage payment, your servicer may pay the taxes due on your home before the County has had an opportunity to assess your new property tax based on your purchase price.
If the new property tax base is greater than what was calculated by your lender, you may receive a supplemental tax bill to cover the difference. If you receive a check from the County Tax Assessor’s office, you will receive a supplemental tax bill.
You received the check because the lender over-paid the taxes according to the County. Keep in mind that this dollar amount may come back to you down the road.
Most lenders will collect the correct amount of taxes, and therefore eliminate, or minimize your supplemental tax bill. It’s not usually a big deal, and knowing that it may be coming is important.
It can take up to a year for a home to be assessed in many places.
Congratulations, You’re a Homeowner!
The joy of moving may begin, depending on the terms of your purchase contract. It is not uncommon for the seller to remain in the home for several days to allow them to move everything out.
This should not be the last time you see your real estate agent and lender. If they did a good job for you, evidenced by you still being alive, and sitting in your new home :), then you just earned two trusted advisors as you buy and sell real estate throughout your life.
If you have questions about turning your first home into a rental property, ask your loan officer and tax preparer how that works.
That’s it. You’re finally done!
Frequently Asked Questions About Signing, Funding, and Recording Your Mortgage:
What Does Lender Funding Mean? What Does Loan Funding Mean?
“Lender funding” or “loan funding” for mortgages happens when the company that is giving you your mortgage sends the money to purchase the property to the title or escrow company. The title or escrow company will then pass it on to the seller of the house once closing occurs. Lender funding usually happens 1-2 days before closing and has to happen before you close.
You generally don’t have to worry about the process of lender funding – it’s the responsibility of your mortgage company and the title and/or escrow companies to make it happen. They’ve done it thousands of times, and have figured it all out.
What Does Recording A Mortgage Mean?
Recording a mortgage is the process of filing your deed and/or your mortgage with the county where the property lies. It is part of the process of validating and recording that the property is legally yours, and recording the identity of your mortgage lender in case they someday need to foreclose on the property.
Recording a mortgage is an important process in the exchange of property. Recording makes your deed and other important documentation parts of the public record in your county. By having all properties recorded by the county, ownership disputes are minimized. It is also vital to have your mortgage recorded because it verifies your ownership of the property when you want to sell it later on.
When you buy or sell a property using a mortgage lender and a title or escrow company, they record the mortgage as part of the process of issuing your mortgage. They recognize that the mortgage lender won’t give you the keys to your property until it has properly been recorded.
You will have to pay a recording fee, which varies by location, and will be included as part of your closing costs.
Why am I Asked to Sign Loan Documents Before Closing?
As part of the process of completing the sale of a property where a mortgage is involved, there are documents that need to be signed, then they are checked by the mortgage lender’s funding department. It makes sense – they need to make sure everything is completed and signed properly before they hand over hundreds of thousands of dollars.
How Long After Signing Loan Docs Does Escrow Close?
Depending on the day of the week and the time of day you sign your loan documents, you should assume it will take 24 – 48 hours before those documents are received by the Escrow Officer for review. The process usually takes less time, but you should plan that time into your schedule just in case. Remember that the escrow company then has to schedule a time for the buyer to sign their papers, so just because you’ve signed your documents does not yet mean the property is yours. It’s always a challenge when someone schedules moving trucks to roll up to the house right after their signing ceremony, only to discover that they don’t yet have the keys to the property.
Talk with your mortgage lender as you get close to closing. They will let you know when you can count on getting your keys to your new home.
How Long Does Recording Take After Closing?
Oftentimes recording can take place on the same day as your closing, but sometimes it can take several days, especially if your closing is late in the day on a Friday or just before a holiday.
The process of recording typically takes only a few hours. However, since recording is done by local government officials who usually only work typical business hours on weekdays, if your closing takes place late in the day, especially late on a Friday or just before a holiday, you may have to wait several days for your deed and mortgage information to be recorded.
Since you can’t move in until recording takes place, we generally recommend that you schedule your closing as early in the day as possible, giving time for your deed to be recorded and your loan to be funded, so you can get your keys and move in as soon as possible
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