When you purchase or refinance a home, the last step in the process is called the closing. This is when you finalize all the details of the transaction. Knowing what’s expected of you and understanding key homebuying terms can make the process smoother.
Buying a home is an exciting milestone but the process doesn’t end when you close on your mortgage. The mortgage closing is just one step in the journey of homeownership. Many buyers wonder what happens after mortgage closing?
In this guide, we’ll walk through the key things every new homeowner should know and do after closing on a mortgage.
Overview: What to Expect After Closing
After your mortgage closing you’ll need to take care of some important tasks
- Secure your closing documents
- Change your address
- Make your first mortgage payment
- Prepare for changes in your payment amount
- Watch out for solicitation mail
You’ll also need to understand what happens to your mortgage after you close. Your loan could be sold or the servicing rights transferred to a new company.
While closing marks the end of the home buying process, there’s still work to be done as a new homeowner. Being prepared for what comes next will make the transition go smoothly.
Secure Your Closing Documents
At your mortgage closing, you should receive a stack of important documents like your promissory note, deed of trust, title insurance policy, and closing disclosure. These documents prove your ownership and provide critical details about your mortgage.
It’s essential to keep these documents in a safe, secure place. Consider putting them in a fireproof safe or safety deposit box. If you received digital copies, make sure they are password protected.
Having easy access to your closing documents makes it easier to resolve any issues that come up with your mortgage servicing or homeownership.
Officially Change Your Address
One of your first tasks as a new homeowner is making your address change official. Here are some things to do:
- Update your driver’s license: Most states require you to change your address within 10-30 days. Check your state’s regulations.
- Change your voter registration: Visit your local election office or go online to update your home address.
- Notify the USPS: Fill out a Change of Address form with the post office to forward your mail.
- Update accounts: Change your address with banks, credit cards, insurance providers, and other accounts.
Updating your important documents and accounts ensures your mail and billing information goes to the right place.
Make Your First Mortgage Payment
Your first mortgage payment is usually due within 30-60 days after closing. Check your closing documents to confirm when the first payment must be made.
If you set up automatic payments, verify that the withdrawals will start being made on time. You may need to make the first payment manually while auto-pay is established.
Making that first mortgage payment is exciting – it means your home is officially yours! Just be sure you meet the deadline to avoid late fees or credit damage.
Prepare for Payment Changes
Your mortgage payment could change over time, so be prepared:
- Escrow adjustments: If your taxes or insurance premiums increase, your escrow payment will go up.
- ARM adjustments: Adjustable-rate mortgages can see payment increases when the interest rate changes.
- PMI removal: When you reach 20% equity, you may be able to cancel PMI and lower your payment.
Know the terms of your loan so you aren’t caught off guard by payment changes. Read any notices from your mortgage servicer closely.
Understand What Happens After Your Mortgage Is Sold
There’s a good chance your mortgage will be sold after closing. This is common in the mortgage industry.
When your loan is sold, the terms cannot change. The only difference is you’ll send payments to the new entity. Here’s what might happen:
- Servicing rights sold: You pay a new servicer, but your original lender still owns the loan.
- Loan sold: A new investor owns the loan and collects your payments. Servicing transfers too.
Either way, you’ll get notices from both the old and new servicers informing you of the change. Having your loan sold doesn’t affect your rights or homeownership.
Watch Out for Solicitation Mail
Now that you’re a homeowner, you’re likely to start getting mail and calls offering home services and insurance. Some common offers:
- Security systems
- Satellite TV
- Lawn care
- Mortgage protection insurance
Much of this is junk mail trying to make a sale. Be wary of high-pressure sales tactics. Do your research before buying add-on products and insurance.
As a new homeowner, solicitation mail can be annoying. But inspect each piece to watch for important notices from your mortgage company.
Enjoy Your New Home!
While there are still loose ends to tie up, be sure to take time to enjoy your new home after closing! Host a housewarming party, meet your neighbors, and start decorating and customizing your space.
Homeownership brings many responsibilities, but it also lets you build equity and stability. With the hard work done, this is your chance to make the house your home.
Closing on your mortgage is just the first step in the journey of homeownership. Knowing what to expect after the closing makes the transition go smoothly. Securing documents, updating your address, making payments on time, and understanding loan servicing will set you up for success.
How long does it take to close on a house?
Closing day typically happens four to six weeks after you sign the sales and purchase contract, though it may take longer. The closing process itself may take several hours.
Once all the papers are signed, you’ve secured your mortgage and the closing is officially complete, you’ll receive the keys to the property. Be sure to store all of the documents you received during the closing in a safe place. You can also now change your address, meet your new neighbors and move in.
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What Happens On Closing Day?
FAQ
What is the next step after closing on a house?
New homeowners have a fresh checklist to complete once they close on their home. You’ll want to clean, paint and complete upgrades before moving furniture in. Review your homeowners insurance and home budget to plan for the future.
What happens to a mortgage after closing?
But to answer your question, when you sell the home the full balance of your loan comes due. You pay the loan off with the proceeds from the sale. A title company sorts it all out and makes sure the money goes to the right accounts at closing.
Is closing day the day you move in?
Closing is the final step in the home-buying process. During closing, all outstanding fees are paid, escrow funds are cleared, and the buyer and seller sign the necessary documents to transfer ownership. Typically, you can move in immediately after closing, but several factors might influence this timeline.Sep 5, 2024
What to do immediately after closing?
- Step 1: Change Locks and Key Codes.
- Step 2: Change Addresses on Accounts.
- Step 3: Change Utilities to Your Name.
- Step 4: Save Key Legal Documents.
- Step 5: Notify Friends and Family.
- Step 6: Review Inspection Report.
- Step 7: Estate Plan (Will and Power of Attorney)
What should I expect at a mortgage closing?
For these kinds of loans, you should receive Truth-in-Lending disclosures. If you are shopping for a reverse mortgage, you will also receive a Good Faith Estimate (GFE) and a HUD-1 Settlement Statement. Review the documents for accuracy and ask any questions you have. Learn more about what to expect during the closing.
What happens at a mortgage closing?
Your mortgage closing will likely be held at the office of the title company, an attorney or the lender. You’ll want to bring copies of any paperwork you received or signed throughout the homebuying process, as well as two forms of ID and the payments you will make. Here’s what happens during the closing:
How long does a mortgage closing take?
The closing process itself may take several hours. Once all the papers are signed, you’ve secured your mortgage and the closing is officially complete, you’ll receive the keys to the property. Be sure to store all of the documents you received during the closing in a safe place.
Can a mortgage loan be sold after closing?
After your mortgage closing, there is a good possibility that your loan will be sold. While this concept may cause fear for some folks, there’s really nothing to be concerned about. The terms of your mortgage loan cannot change. The only change that should occur when your loan is sold is where you send your payments. Don’t Want Your Loan Sold?
What happens at closing?
What happens at closing is the culmination of more than a month of gathering and preparing documents. For closing to go off without a glitch, your closing officer, your lender or loan officer and your real estate agent have to work together to get everything in order and processed correctly.
What is closing on a house?
Closing on a house is the final step of the home buying process. Better Money Habits® can help you understand the mortgage closing process – from document signing to closing costs so you can feel confident and prepared.