(Updated 11/28/24)
Congratulations, you’re pretty far down the path to securing a new home using a VA Loan. So what is closing day like and what should you expect?
The Grand Finale: Closing Day
Think of closing day as the season finale of your favorite show. It’s where all the plotlines converge, and everything comes to a satisfying conclusion (hopefully). Here’s what you can expect:
1. The Venue: Where the Magic Happens
Closing typically takes place at a title company office, a real estate attorney’s office, or even a bank. It’s a professional setting, but feel free to bring your lucky pen for signing.
2. Who Will Be There?
- You: The star of the show. You’ll be signing documents and making important decisions.
- The Seller: The other half of the transaction. They’re there to transfer ownership to you.
- Closing Agent: The director of this production. They handle the paperwork and ensure everything goes smoothly.
- Real Estate Agents: Your and the seller’s agents may be present to assist with any last-minute details.
- Lender’s Representative: Sometimes, a representative from your lender will attend to finalize the loan.
3. The Paperwork Parade
Get ready to sign your name more times than an autograph session. Here are some of the key documents you’ll encounter:
- Closing Disclosure: This document outlines all the costs associated with your loan. Review it carefully to ensure there are no surprises.
- Loan Agreement: This is your contract with the lender, detailing the terms of your VA loan.
- Deed of Trust or Mortgage: This secures the loan and gives the lender a claim against your home if you fail to make payments.
- Promissory Note: Your promise to repay the loan according to the agreed terms.
- Title Documents: These confirm that the seller has the legal right to transfer ownership to you.
4. Closing Costs: The Final Bill
While VA loans come with benefits like no down payment and no private mortgage insurance, there are still some closing costs to cover. These might include:
- Loan Origination Fees: Charged by the lender for processing the loan.
- Title Insurance: Protects you and the lender from any legal disputes over the property.
- Appraisal Fees: Covers the cost of the home appraisal.
- Recording Fees: Paid to the local government for recording the new ownership.
Tip: Some of these costs can be negotiated or covered by the seller, so review your Closing Disclosure carefully.
5. Funding Fee: The VA’s Cut
VA loans typically come with a funding fee, which helps offset the cost of the VA loan program. The fee varies based on factors like your down payment amount and whether it’s your first VA loan. It can be paid upfront or rolled into the loan amount.
6. Last-Minute Checks
Before you sign on the dotted line, make sure to:
- Do a Final Walkthrough: Inspect the property to ensure it’s in the agreed-upon condition.
- Review Documents Carefully: Don’t rush through the paperwork. Take your time to read and understand each document.
- Ask Questions: If anything is unclear, don’t hesitate to ask for clarification. This is a big decision, and you deserve to be fully informed.
7. The Moment of Truth: Signing and Funding
Once all the documents are signed, the closing agent will send them to the lender for final approval. The lender will then release the funds, and the transaction will be complete. You’ll receive the keys to your new home, and the seller will get their money.
8. Post-Closing: The After Party
After closing, there are a few more things to take care of:
- Change the Locks: For security purposes, it’s a good idea to change the locks on your new home.
- Update Your Address: Notify the post office, your employer, and other important contacts of your new address.
- Set Up Utilities: Ensure all utilities are transferred to your name and set up before move-in day.
Conclusion: Welcome Home!
Closing on a VA loan might seem daunting, but with a little preparation and a sense of humor, you can navigate it with ease. Remember, this is the final step before you become a proud homeowner. So, take a deep breath, review your documents carefully, and get ready to celebrate. Congratulations on your new home!
Where to Learn More
For further reading and to ensure you’re fully prepared for the VA loan closing process, check out these resources:
- Veterans Affairs: – Offers comprehensive guides and resources on VA loans and benefits.
- Consumer Financial Protection Bureau (CFPB): – Provides detailed articles and tools to help you understand the mortgage process.
With this guide in hand, you’re ready to tackle the VA loan closing process like a pro. Happy homeownership!
