Loan Closing

Closing on a Loan

Loan closing begins once a borrowing client has been approved. Most of the time, the documents required are prepared by the lender. Once signed, they are forwarded to a closing agent to authorize the release of funds.

These final closing steps are particularly important. Most of the time, each lending company sends very specific instructions that dictate all the conditions that need to be met before the loan is officially closed. Some legal requirements need to be followed before the closing agent can confirm the approval of funds.

Required Documents Necessary for Loan Closing

The most important documents for a signing agent to process are the mortgage note, security instrument, truth in lending statement, deed of trust riders, and closing statement. The mortgage note outlines the total debt amount, payment terms, interest rate, and the name of the borrower and lender, while the security instrument and deed of trust riders are recorded as documentation that the borrower has security for the repayment of the loan. The truth in lending statement documents an actual cost and annual percentage rate of the loan.

Finally, the closing statement lays out all final costs and arrives soon after the loan is closed. This document is sent to the borrower by mail within 3-5 days after loan closing or can be updated through an online emailed file. Once this is all done, the loan can be considered closed and funds can now be sent.