Final Approval & Closing Day Overview (Video)

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The final loan approval is forthcoming and we’re in the home stretch of the mortgage loan process. {Insert high-pitched excitement squeal here}. The initial underwriting approval has been issued the conditions have been submitted the Underwriter. The next major step is closing day.

Please review this page carefully. It’s loaded with important details that are imperative for closing. As always, please reach out to the Mortgage Mark Team with any questions.

Closing Day Overview

The Underwriter issues the Clear To Close (CTC) once all the conditions meet the guidelines. The Closing Department then sends the title company the “loan instructions” so they can prepare the final Closing Disclosure (CD).

The final Closing Disclosure (CD) will provide the exact amount of money due at closing. The Final CD is typically available a day (or two) before closing. The title company will send the CD to us and our Processor then forwards it to you.


MORTGAGE LOAN PROCESS OUTLINE

Click here for an overview on each step.


What to Expect at Closing

Closings typically take one hour. The first 45 minutes will be you signing your life away. The last 15 minutes are for title to make copies of everything you sign.

Some title companies will offer you a paperless medium for your copies: such as a CD, flash drive, email, etc.. The closing loan package contains between 80 to 120 pages of documents depending on the loan program. Please allow an additional 30-50 pages if a second lien is part of the loan.

The closing docs will need to be signed with a blue pen (so leave that lucky black pen at home). The signatures will need to match the loan documents exactly.  Example: if Joe Smith has a legal name of Joseph Bartholomew Smith Jr. then he will be required to sign that full name even if his normal signature is Joe Smith. Good luck Joe.

For refinance home loans, the names on the documents will be what’s shown on the vested deed. Please let us know immediately if you have changed your name since title was vested; we will need to address this with our doc prep attorneys.

Must Be Present at Closing

Everyone on the loan (any possibly spouses) need to be at closing. Spouses are required to sign documents for mortgages made on primary residences in community property states (like Texas) – even if the spouse isn’t on the loan.

A non-purchasing spouse is required to sign certain documents in a community property state since they have an inherent vested interested in the property. As an FYI, Texas does not recognize legal separation; someone is either married or unmarried.

Remote Closings

Please let us know ASAP if party is unavailable to sign the closing documents at the title company the day of closing. This includes the Seller. We can plan for either a “mail out” closing, a mobile notary, or a Power of Attorney

A mail-out closing requires the title company to send the closing package to the absent party a few days before funding. The absent party can sign the documents (in front of a notary) and return them to the title company by the funding date.  

Another options is to arrange a mobile notary if the absent party is local but unable (or unwilling) to go to the title office. Mobile notaries typically cost $150 to $175. Visit https://www.superiornotaryservices.com/ to find a mobile notary near you.  

Closing Location

We don’t know where you will be closing; you’ll need to ask the title company for details. Your Realtor may be scheduling the details of closing for you. 

You’re welcome to reach out to the title company directly to confirm the time and location of closing fits your schedule.

You don’t necessarily have to close at the title office listed on the contract. Often times you can close at a “sister” title company, or at a place of your choosing (like your office or home). A mobile notary fee may be charged if you choose to close remotely. Be sure to ask the title company for details.

Please let us know the details of closing once they are finalized so we can plan accordingly.

What Time Should We Close?

We highly recommend closing between 10:00 a.m. and 12:00 p.m. if possible. The late morning closing allows enough time for any last minute questions, a walk-through on the home, time to run to the bank, and time for any last minute cosmetic changes to the CD that may arise from your review.

A mid-day closing also allows enough time for the title company to request funding from the lender.

When Is It Official?

The transaction is officially complete when the title company notifis everyone (including us) that the loan has funded. Our funding page will provide more information on the timing and details of funding the loan. 

For purchases, funding typically occurs an hour or two after all parties have signed.

For refinances, the loan funds after a three-day rescission period… unless it’s a second home or investment property, then it funds the same day as closing.


Closing Documents On A Mortgage Home Loan Top Mortgage Broker near Dallas Texas

Lenders May Update Credit Before Closing

Many mortgage lenders will update your credit report a few days before closing. Notice we said “update” and not “repull”. Updating the credit balances doesn’t count has a hard inquiry on your report.

Within a few days of closing a lender may update your credit inquiries to see if your credit has been pulled during the home loan process. An explanation (and potentially for documentation) will be required for any new credit inquiries.

Lenders may also update your credit balances and monthly payment amounts. This means recent credit inquiries and credit disputes will be listed as well. For this reason we strongly recommend that you DO NOT attempt to get new credit during the home buying process.

All of these factors could impact your loan approval and delay the process. If you want a smooth and on-time closing then please help us help you and check out the Do’s and Don’ts When Getting A Mortgage.

Updated Balances

Once the credit is updated, the Underwriter will verify that the debt to income (DTI) ratios are still in line with guidelines and that you qualify with the new balances and monthly payments.

If you don’t qualify then everyone has a real problem as closing is around the corner. So don’t go buying new furniture for a house that you don’t yet own.

Inquiry Letter Needed

The updated report will show any new credit inquiries since the credit report was pulled. It doesn’t matter if the inquiry was for a new credit card, a new car, a new business loan, etc. – it will be reported.

If there are any new entries on the report the borrower must provide a “Credit Inquiries Letter” explaining each inquiry and provide an affidavit on whether any credit was opened. If any credit was opened (even with a zero balance) the borrower must provide documentation outlining the details.

These additional actions will most likely delay closing because the file will need to be resubmitted to underwriting for review. Again, we strongly recommend that you do not pull your credit during the mortgage process and live life “normal” until after closing.


What to Bring to Closing

  • Driver’s License(s) or some form of government ID
  • Power of Attorney Documents (if applicable)
  • Funds for Closing – typically a cashier’s check or money wire

Driver’s License

You will need to bring your driver’s license (or some form of government-issued ID such as a passport, identification card, etc.). If you’re not a U.S. Citizen then you will need to bring your Visa and/or Green Card as well. They will want two forms of ID.

POA Original Documents

Please check out our Power of Attorney section if someone is going to sign on behalf of an absent party.

The absent party must be available via phone at the time of closing to provide identification and consent that they still want to proceed with the transaction. The person doing the signing will need to bring the original Power of Attorney to closing (or provide it to the title company in advance).

Acceptable Funds For Closing

The funds for closing will need to come from sources that were provided to the lender AND must come from an account belonging to the person on the loan (or from the donor’s account if there are Gift Funds).

Please note that we are unable to initiate any transfer on your behalf. You must take the necessary actions to provide the funds to title.

Title companies may have their own guidelines regarding how the money is sent to them. Some mandate that the fund be wired, while other title companies may only accept cashier’s checks. Please connect with the title company to confirm their preferred method.

Cashier’s Check

This is the most common method of providing funds for closing.  Go to your bank and get a cashier’s check (a.k.a. a certified funds check) and have it made payable to the title company for the amount due.

We personally prefer this method because it removes any chance of error by a third party. Wiring funds requires additional steps (and people) that are beyond your control.

Wire Transfer

You can wire money from your financial institution directly to the title company. You will need to contact the title company directly for their wiring instructions and contact your bank for details on how to wire the funds.

Please make sure you initiate the wire transfer with enough time for the funds to be received by the title company before the funding date. We recommend initiating the wire three days before funding to be safe.

Personal Check

We do NOT recommend personal checks. Texas title companies won’t typically accept personal checks unless the amount is under $1,500. However, that $1,500 is not a standard amount and some title companies may have lower limits.

Please confirm this limit with the title company before the closing date to ensure a smooth closing.

Proceeds From Sale

If you are selling a home and want to use the proceeds from the sale, the title company that is part of the sale transaction can wire the proceeds directly to the title company that is handling the purchase transaction.

No action is required is the sale and purchase completed at the same title company.

Cash Back

Please bring a voided check if you expect to receive a refund at closing. The title company can wire the funds directly to your account upon funding.

Alternatively, you can provide title with wiring instructions from your financial institution if you want the funds wired to your account.

By default, the title company will issue a check if you forgot to bring a voided check or provide wiring instructions.

Briefcase of Cash… Kidding. Cash is NOT an option.

Cash is not an acceptable source of funds for closing. We’re just making sure you’re paying attention.

Voided Check for Refund of Excess Funds

Occasionally a borrower will bring an amount in excess of what’s required at closing.  The title company will refund the difference after closing when excess funds are provided.

Excess funds typically occur when either:

  • a previous home is sold and the proceeds are used to fund the new loan, or
  • when money is sent to title in advance of the Closing Disclosure being prepared. 

We recommend bringing a voided check to closing so the title company can wire the funds directly back to your account. You can also provide the title company with wiring instructions for your bank to receive the excess funds. Lastly, the title company can provide you with a check if you do not provide a voided check or wiring instructions.

What’s Next

Once the final underwriting approval is issued the file will be assigned to a Closer. The lender’s Closer will work with the attorneys to prepare closing instruction and send docs to title.

Previous: sign the initial Closing Disclosure (CD)

Next: docs to title & final CD issued