The mortgage loan closing (or settlement) is the formal meeting at which you take official ownership of the property. Actual possession of the property varies according to local practice and the terms of the contract. In some areas, possession is given to the buyer on the day of closing. In other areas, this occurs a day or two after.

At closing, the buyer requires that the seller prove the title (ownership) is complete and free of anyone else's claims. Technically, two separate closings occur at this time: the closing of your loan and the closing of the sale.

The closing meeting is typically attended by the buyer and seller (and their attorneys if they have them), both real estate sales professionals, a representative of the lender, and the closing agent. The meeting takes about an hour and is usually held at the closing agent's office. In addition to a number of other activities, you'll be required at that time to review and sign various documents relating to the mortgage loan and pay closing costs.

The final days and weeks before closing can be a stressful period for both buyer and seller. For example, you may worry that something will happen prior closing to prevent the sale. The following activities must be performed in the final weeks before closing:

• Review the Commitment Letter
  Be sure you understand all conditions of the loan offer stated in the lender's commitment letter. Check to see if all conditions have been met before closing. For example, if the home you are buying has been found to be in violation of a building code or zoning regulations, the lender may specify that those problems be corrected before the closing. You need to make sure the work is finished and done properly before closing.

   

• Set the Closing Date
  An estimated closing date is usually specified in the sales contract. After your mortgage loan is approved and the commitment letter is accepted, a firm closing date needs to be set. You need to be sure that closing takes place before the lender's commitment expires and while the interest rate lock-in, if there is one, remains valid. You should request from your closing agent a statement confirming the date, place, and time and a list of items you need to bring to the closing meeting.

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