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 lenders 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 a 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 is probably two to three days from the day you signed, and it seems like three weeks. 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 1pm PST / 4pm 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 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. Ok, let me try to make this english. Let’s say for example your loan records in October. Your first mortgage payment is due on December 1st.
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 my local Counties of Southern California.
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!