Be prepared for closing - and make sure it is done on time!

Buying a home is one of the biggest purchases of your life.  It is exciting – but can also be stressful.  Mortgage Lending as a whole is one of the most regulated types of lending that one will endure.  Much of the regulation is to help protect you, the borrower.  When you get a loan, you will be asked to verify funds to close, and provide payroll information, etc. 

The process behind the scenes (with the lender) is an ongoing detailed process that is generally not finalized until 24 hours prior to closing.  Many professionals work together to make this happen for you: your Realtor, Loan Officer, Underwriter, Appraiser, Title Attorney, and Closing Agent.  Closing on time is one of the most important features Ocean Communities offers to its borrowers, so we are involved as a lender with all parties to do what it takes to get you into your home when you expect to be.

You can be prepared for what you might face at the end of your loan process if you do the following:

Keep your Good Faith Estimate (GFE) close by.

Your GFE is the summary of your estimated closing costs associated with your Mortgage Loan Application.  A GFE is not required to be presented to a borrower until a Purchase & Sale Agreement has been presented to the Lender.  Anytime your loan request changes (increased loan amount, loan program change, and rate change) a new GFE must be delivered to the borrower.  It is important to keep the GFE handy because the costs on this Estimate have to be within a specific range of the costs on HUD Settlement Statement.  (See below)

 “There are three categories in the Comparison Chart (page 3 of the HUD Settlement Statement) Charges that could not increase at settlement, changes that in total could not increase more than 10% and charges that could change.  Compare the charges listed in the GFE column with the charges in the HUD column.  If the charges that cannot increase have increased or the total of the charges that cannot increase more than 10% have exceeded the 10% increase limit, the lender must reimburse you at settlement or within 30 days after settlement.” - From the HUD Settlement Booklet

Understand your costs due at closing.

A HUD Settlement Statement is generally available to a borrower 24 hours prior to closing, which allows time to collect the certified funds check for the amount that is required at closing.  Because a Title Attorney or Closing Department has to prepare such a statement, it is normal not to have an exact amount due at closing until that time, but your Loan Officer should be able to provide you with a rough estimate.  Because Escrow Accounts are regulated by guidelines as well, this is the biggest reason for the Settlement Statements delay.  The one preparing this closing document has to know a date of closing and have collected tax bill, and homeowner’s insurance binder to ensure the Escrow Account has collected enough funds at closing and with the monthly payment to ensure future tax payments and insurance policy renewals get paid on time.

Work with a lender that has a track record for closing on time.

A delay in closing can mean a great deal of inconvenience and additional stress.  There are several credit unions in Maine, including Ocean Communities FCU, that offer a wonderful program called CU Promise.  CU Promise is backed by 3 guarantees that as a buyer should be looking for:

• Guaranteed Same-Day Decision
• Guaranteed Closing Date
• Guaranteed Local Servicing