House Closing Process: 10 Steps You Should Know
You’re in the last stretch of your homebuying journey — you’ve chosen a home, secured your mortgage approval and now one final step remains: the house closing process. We’ll cover what to expect and how to prepare so you can cross the finish line with confidence.
- The home closing process involves various steps, including a home inspection and final walk-through of the property.
- It takes about 42 days on average to close on a house.
- Closing delays can occur because of issues with the financing, inspection or appraisal.
1. Review your closing documents
Carefully review the documents related to your home purchase, including the closing disclosure, mortgage and title documents. It’s a good idea to compare the closing disclosure to the loan estimate to see if the information matches up.
The closing process kicks off once you’ve signed the purchase agreement and are considered “under contract” on a home.
The three-day rule refers to a law that requires lenders to provide homebuyers with their closing disclosure at least three business days before closing. The rule ensures that buyers have enough time to review the document and understand their final loan terms and costs before sitting down at the closing table.
2. Bring in a real estate lawyer
It’s generally recommended to hire a real estate attorney to be a second pair of eyes on the closing documents and make sure there aren’t any issues with the paperwork. Working with a real estate lawyer is mandatory in some states, including Georgia, New York and North Carolina.
3. Consider a mortgage rate lock
During the house closing process, you may want to consider locking in your mortgage rate. This helps protect you from potential rate increases before finalizing your purchase. Without a rate lock, you leave yourself vulnerable to rising interest rates, which could increase your monthly payment and, in some cases, even affect your loan approval. Rate lock periods vary by lender but typically range from 30 to 60 days. Keep in mind: If rates drop during the lock period, you could be stuck with the higher rate unless your lender offers a float-down option.
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4. Order a home inspection
Getting a home inspection is crucial to uncover potential problems with the home that could affect its livability, safety and value. The cost for a professional home inspection depends on several factors, such as location and property type, but typically ranges from $125 to $1,000.
You may also want to consider getting a pest inspection if you’re concerned about damage from wood-destroying insects, like termites.
5. Negotiate with the seller
If issues are found during the inspection, you can try negotiating with the seller. You can request that the seller make the necessary repairs before you take ownership or negotiate the purchase price to reflect the costs of covering the repairs yourself. If you can’t come to an agreement with the seller, you may be able to back out of the deal.
6. Purchase homeowners insurance
Before completing the closing process, you’ll need to show proof of homeowners insurance. Prices and coverage can vary by company, so it’s important to shop around for the best deal. Homeowners insurance costs also depend on the property type (such as single family or multifamily) and the home’s age, condition and location.
7. Get your finances in order
You’ll need to fork over some money to close on your new home. Closing costs are generally 2% to 6% of the loan amount and include various charges, like loan origination fees, credit report fees and appraisal fees. You’ll also need to provide your down payment funds. In some cases, sellers may agree to pay a portion of your closing costs as a seller concession.
Unfortunately, mortgage closing scams target homebuyers during the process of closing on a house. One of the most common tactics is phishing, where scammers pose as trusted real estate professionals, such as your real estate agent or title company, and attempt to trick you into wiring your closing costs into a fraudulent account. Always verify wiring instructions directly with your agent or title company before sending funds.
8. Gather final documents and questions
You’ll want to collect the necessary documents to bring to closing day, including a government-issued photo ID, like a driver’s license or passport. Also bring a cashier’s check to pay the closing costs unless you’re wiring the funds. The following is a list of questions you may want to ask at the closing:
- Where do I pick up my house keys?
- What are the utility companies for the property? (Electric, gas, water, internet, etc.)
- When is my first mortgage payment due?
9. Do a final walk-through
The final walk-through is your last chance to ensure everything is in order before the house is officially yours. It allows you to confirm the property is in the expected condition and that any requested repairs have been addressed. The walk-through usually occurs 24 hours before closing day.
10. Sign your closing documents and get your keys
You’ll sign a stack of paperwork on closing day, including the closing disclosure, deed of trust and promissory note. After signing the required documents and paying closing costs, you’ll receive the keys to your new home. Congratulations — you’re officially a homeowner!
How long does it take to close on a house?
The time it takes to finish the home closing process depends on whether you’re buying with a mortgage or cash. Cash purchases typically close faster, since they have fewer requirements than mortgages. It can also vary based on your loan type — conventional loans tend to close faster than government-backed loans, such as FHA loans and VA loans. The average time it takes to close on a purchase loan is 42 days, according to data from ICE Mortgage Technology.
Learn more about closing process timelines by loan type.
Frequently asked questions
It depends on your contract terms. In some cases, you’re allowed to immediately move in on closing day. However, sometimes a different possession date — such as 15 or 30 days after closing — is specified. This usually occurs when the seller needs more time to move out of the home.
Ownership of the property officially transfers from the seller to you, the buyer, on closing day. This marks the final step in the homebuying process and generally occurs after reviewing and signing your loan documents, paying any closing costs and providing proof of homeowners insurance.
Common reasons a house closing could be delayed include:
- Financing issues
- Inspection or appraisal problems
- Title issues
- Incomplete repairs
- Issues uncovered during the final walk-through
- Missing documents
- Not responding to lender requests for additional information
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- 1. Review your closing documents
- 2. Bring in a real estate lawyer
- 3. Consider a mortgage rate lock
- 4. Order a home inspection
- 5. Negotiate with the seller
- 6. Purchase homeowners insurance
- 7. Get your finances in order
- 8. Gather final documents and questions
- 9. Do a final walk-through
- 10. Sign your closing documents and get your keys
- How long does it take to close on a house?
- Frequently asked questions
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