For both your Loan Officer and you, this is fantastic news! It means we have all the necessary documentation and your loan has been approved. We’re ready to close the deal and get you into your new home.

A few days before your closing date, your Loan Officer will contact you to review the final details, ensuring there are no surprises on the big day.

What Happens at the Closing?

The closing is when you finalize your home loan and officially become the homeowner. It typically takes place at the office of a title company or attorney who acts as our agent. If you’re purchasing a home, the seller might also be there to transfer ownership, though in some states, this happens separately.

During the closing, you will review and sign several legal documents. Don’t worry, the closing agent or attorney will be there to answer any questions you have, or you can ask your loan officer if you prefer.

Key Documents You’ll Sign at Closing

We hope you have been practicing your signature because you’ll be signing a large stack of papers. Here are the most important documents you need to know about:

Closing Disclosure (CD):
This document provides a complete breakdown of all the final fees associated with your loan. If you’re buying a home, it also lists fees related to the transaction between you and the seller. For refinances, it shows the payoff amounts of any existing mortgages.

The Closing Disclosure replaced the HUD-1 and Truth-in-Lending Statement for most loans since October 2015.

The Promissory Note (The Note):
This is the document where you agree to repay your mortgage. It lays out all the details of your loan, including the interest rate, the length of time to repay it, and the penalties you may face if you fall behind on payments. This is your official promise to pay.

Mortgage or Deed of Trust:
This document pledges the property to the lender as security for the loan repayment. In simple terms, it means the lender can take ownership of the property if you fail to make your mortgage payments. The Mortgage or Deed of Trust restates the basic information from the Promissory Note and details your responsibilities as the borrower.

If you’re refinancing, Federal Law requires that you have three days to decide positively that you want a new mortgage after you sign the documents. This means that the loan funds won’t be disbursed until three business days have passed.

Understanding Your Closing Costs

A home loan involves a variety of fees, such as appraisal fees, title charges, and local taxes. These fees can vary by state and lender. We take great care to provide a complete and accurate estimate of your closing costs.

Here’s how we group them for clarity:

Third-Party Fees

Fees collected and passed on to a third party that performed a service. Examples include:

• Appraisal Fee: Paid to the appraiser.
• Credit Report Fee: Paid to the credit bureau.
• Title Insurance Fees: Paid to the title company or attorney.

Other third-party fees may include the settlement or closing fee, the survey fee, tax service fees, flood certification fees, and courier/mailing fees. Fees may vary between lenders based on their negotiated rates.

Taxes and Other Unavoidable Fees

These are fees you will likely pay regardless of the lender you choose. They include state and local taxes and recording fees. If a lender’s quote seems too low, it may be because they haven’t researched these unavoidable fees to provide an accurate estimate.

Lender Fees

These are fees that the lender retains in exchange for the loan, such as:

• Discount Points: Fees paid to lower your interest rate.
• Loan Processing Fees: Charges for processing your loan application.

This is the category you should compare most closely when shopping for a lender.

Other Potential Expenses

You may need to prepay some items at closing that are due in the future.

• Per Diem Interest: All our mortgages have a payment due date of the first of the month. At closing, you’ll pay the interest from your closing date through the end of the month. This means your first mortgage payment won’t be due until the following month. For example, if you close on June 15, you’ll pay interest for June 15-30 and your first mortgage payment won’t be due until August 1.
• Escrow Account Deposit: If you have an escrow or impound account, you’ll make an initial deposit at closing to cover future property taxes and insurance premiums.
• Homeowner’s Insurance: For a home purchase, you’ll need to pay for your first year’s homeowner’s insurance premium before or at closing.
• Mortgage Insurance: If your loan requires mortgage insurance, up to two months of the mortgage insurance will be collected at closing. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.

So, there you have it, what you can expect on your closing day. We know it’s a lot of information, so please don’t hesitate to contact your Loan Officer with any questions you have to feel confident on your big day!

The leaves are changing, the air is getting crisp, and pumpkin spice is everywhere. For many, fall is a season of new beginnings, and it could be the perfect time for you to begin your journey to homeownership.

While spring and summer are traditionally considered the peak seasons for buying a home, the autumn real estate market offers a unique set of advantages that often go unnoticed. Whether it is your first home or you are a seasoned homeowner, here is why fall is a great time to buy a house.

Less Competition in the Fall Real Estate Market

The spring and summer months bring a rush of buyers eager to settle in before the school year starts. By the time fall arrives, that frenzy has typically passed. With fewer buyers in the market, you’ll face less competition on popular listings. You can avoid stressful bidding wars, giving you more time to consider your options and craft a more thoughtful offer.

Motivated Sellers Are Ready to Close

Sellers whose homes have been on the market since the summer are often highly motivated to sell. These homeowners may be eager to close before the holidays or before the cold winter months arrive. This urgency gives you more negotiating power. You can negotiate a better price, ask for concessions on closing costs, or secure a more flexible move-in date.

See Your Future Home in a New Light

Summer sun often masks a home’s potential imperfections. Buying a home in the fall provides a realistic view of the property in various conditions, particularly during the seasonal shift from summer heat to cooler fall days. Plus, with the spring and summer plants going dormant after their growing seasons, you’ll be able to see the property in its entirety, without being hidden by any growth.

Potential Tax Benefits Before the Year Ends

Closing on your home before December 31st can offer significant financial advantages. Homeowners may be able to deduct certain expenses, such as mortgage interest and property taxes, on their income tax return for the current year. While this is not tax advice, it’s a benefit worth discussing with your tax professional.
Want to learn more about the potential Tax Benefits that come with owning your own home? Click Here.

Ready to Fall in Love with a New Home this Fall?

Don’t let the end of the year stop you from pursuing your homeownership dreams. The fall market is a sweet spot for homebuyers, offering a combination of less competition, motivated sellers, and a more streamlined process.

Take advantage of the fall market and get pre-approved for your mortgage today!

Buying a home is an exciting milestone, from making your must-haves list to designing the interior space. However, many potential homebuyers aren’t aware of the things you can’t do when preparing to buy a home.

Here are our top 5 things to avoid as you count down to closing day to ensure a smooth mortgage process.

1. Don’t Make Large Purchases.
   

   Since lenders assess your financial stability based on your credit report and debt-to income ratio (DTI), large purchases like a new car loan, expensive furniture, or even opening a new credit card can temporarily lower your credit score and increase your DTI. These financial fluctuations could cause your lender to re-evaluate your mortgage application, potentially leading to higher interest rates or even a denial.

2. Don’t Switch Jobs.

   Lenders require steady employment with the proof of income. They typically look for at least 2 years of employment history, although you don’t have to have been at the same job for the entirety of that period. A sudden change in employer or income can delay or even jeopardize your loan approval, as it may signal a decrease in financial stability.

3. Don’t Make Large Deposits.
   

   Any unexpected large deposits into your account may raise a red flag or require proof and an explanation. If this large deposit contains gift funds towards your down payment, it’s crucial to talk with your loan officer first. They can provide you with the necessary documentation, such as a gift letter, to keep your loan on track and avoid unnecessary delays.

4. Don’t Miss Payments.
   

   Maintaining a perfect payment history is critical to demonstrating financial responsibility to lenders. A single payment that is past due by 30 days or more can significantly impact your credit score and, as a result, your mortgage application.

5. Don’t Apply for Credit Anywhere.

   Those store cards sound enticing, especially if they can help you save on new furniture and home décor. However, you should avoid applying for new credit until after your mortgage has gone through and you’ve signed all required closing documents. Taking on new credit and increasing your debt-to-income ratio (DTI) makes you appear riskier to lenders, potentially putting your mortgage at risk.

Ultimately, the journey to becoming a homeowner is a marathon, not a sprint. The period between applying for a mortgage and closing day is a critical time when your financial profile is being monitored. By following these key guidelines and avoiding major financial changes, you can help ensure a smooth and successful path to getting the keys to your new home. Your future self will thank you.

Have more questions about the mortgage process?
Connect with one of our loan officers today to get personalized advice and take the first step towards homeownership!

When you’re getting ready to buy a home, choosing the right mortgage lender is one of the most critical plays you’ll make. While those big national banks and online-only lenders might seem like the star quarterbacks, there are powerful reasons to draft a local lender for your homebuying journey.

Here’s why a local lender can be the MVP of your homebuying team.

Home Field Advantage and Playbook Knowledge

Local lenders are like coaches who know their home turf inside and out. They live and work in the community they serve, giving them an in-depth understanding of the local market. They know the key stats, from property values and tax structures to the best local pros to have in your corner.

This expertise is invaluable, especially in a competitive housing market. A local lender can give you the kind of inside scoop that other lenders can’t, helping you call the right plays and make more informed decisions that align with your financial goals.

Personalized, Hands-On Coaching

With a local lender, you’re not just another jersey number on a massive roster. You’re a valued player. Local lenders prioritize building strong relationships and will take the time to understand your unique financial game plan.

You’ll work directly with your dedicated loan officer, your personal coach, who you can meet with face-to-face to go over plays and get clear, timely answers. Many are available around the clock, working weekends to make sure their homebuyers have everything they need for the win. This personalized approach can significantly reduce the stress and confusion of the mortgage process.

Faster, More Efficient Drives

Local lenders often have more streamlined, in-house processes for underwriting and decision-making. Think of it as a no-huddle offense. This means your loan can be processed more quickly and efficiently than with a large national bank. In a fast-moving market, this quick turnaround can be a significant advantage. At Southern Trust Mortgage, our team offers Priority Approval, helping you get to the closing table faster and score the home of your dreams.

Creative Play-Calling and Flexible Strategies

Unlike the rigid rule books of big banks, local lenders often have more flexibility to find creative financing options. If you’re a self-employed small-business owner, have a unique financial situation, or are a first-time homebuyer, a local lender is more likely to take the time to find a winning solution for you. They may even have special programs or grants that you wouldn’t otherwise be considered for.

Everyone’s journey to homeownership is different. It’s not a one-size-fits-all playbook. Choosing a lender with your best interests in mind who understands your unique situation can be the factor that makes your home purchase a memorable win.

Ready to draft your Local Lender MVP? Contact us today to speak with a local loan officer and get a personalized home-buying game plan.