After the Loan Closes: What to Expect
So you bought a house – now what?! There’s so much about the home buying process that is straightforward, but there’s a bit more gray area around what happens AFTER the keys are handed over. All of a sudden, you have a beautiful space to call your own, that you can transform and customize to your heart’s content – but maybe you still have a few questions about being a new homeowner. Below, we’ll share what you should expect once you’ve closed on your new home!
What is a Loan Closing?
We should probably clarify what it means to ‘close’ on a loan. From the moment you submit your loan application, your lender is working on preparing your mortgage for closing day. There are many steps in the process, and fortunately, C&F will be there to walk you through each one of them.
Once your loan officer has all of your required documents and information (bank statements, taxes, personal information, etc.), your loan application will go through the underwriting process. This is where all of your information is carefully reviewed to determine if you meet the qualifications for the mortgage you’re applying for.
Once you’ve made it through underwriting successfully and are given the clear to close, your closing date will be scheduled, and you’ll meet with the closing attorney to sign all of the legal paperwork to transfer ownership of the property into your name. This is also where you’ll transfer any funds (down payment, closing costs, etc.) that are required to complete the transaction. Once all signatures are present, the closing attorney will record the documents to fully complete the transaction, making you a homeowner.
What Happens After Closing?
This is the part you’re probably most curious about, especially if this is your first time buying a home. There are certainly some nuances to understand once your loan has closed. Here are a few things to consider:
1. Determine your mortgage due date
Often, when you close on a home at the end of the month, you will skip a month before making your first payment. For example, if you close on May 21st, you likely won’t make your first payment until July 1st. It’s important to be aware of this to ensure you make timely payments. It’s also a good idea to clarify if there is a grace period for making payments. Many mortgage companies allow you to make your payment anytime between the 1st to the 15th of the month without penalty, but that’s not a given, so always confirm that.
2. Your loan may change hands
If you get a notice that your loan has been sold, don’t fret – this is the typical process. More often than not, your mortgage lender facilitates the loan process and then once the transaction is complete, they will sell your loan to a new servicer (the place you will make your monthly payment). Be aware that you will be notified by your lender that your loan is changing hands, and then you should also receive a welcome letter from your new servicer. If you ever feel suspicious about mailed documents stating your loan is changing hands, it’s a good idea to contact us to confirm that the information is correct.
3. Know that your payment amount can change
The terms of your loan will never change unless you opt to refinance, but if you’re paying your taxes and insurance into an escrow account, know that these dollar amounts can change over time. Annually, the county or city in which you reside will review property taxes, which could mean slight increases or decreases to the taxes owed on your property for the year. Additionally, your homeowners’ insurance may fluctuate by a few dollars per year and could increase more dramatically if you’ve filed a claim. Your servicer will review your escrow account each year and will alert you of any changes that could impact your monthly payment.
4. Be wary of junk mail
You may notice a big spike in the amount of mail you’re receiving once you become a homeowner. A real estate transaction is a public record, so your information is now available to all types of businesses and these businesses all have something they’re trying to sell you. Whether it’s furnishings, home improvement, lawn care services, credit cards, insurance, or something else, you’ll see it come through the mail for a while after closing on your home. You may also see a lot of spam letters pretending to be your lender, but just read the fine print and you should notice the illegitimacy pretty easily!
Once you close on your new home, the best truly is yet to come. Being a homeowner is one of the most exciting and rewarding life decisions you can make and something you’ll reap the benefits of for many years. At C&F Mortgage, we are here for you through every step of the homebuying journey and beyond! Whether it’s buying or refinancing, we’ve got you covered – get in touch with us today to begin!