General information, not legal or lending advice

Closing Day and the Final Walk Through

Closing is the day the home becomes yours. The federal Consumer Financial Protection Bureau (CFPB) calls it a key final step, because it is when you sign legally binding papers that commit you to the loan and give the lender the right to take back the house if you do not make the payments you agreed to. This guide walks through the last few days before closing in Manchester and Coffee County: the Closing Disclosure, the final walk through, what to bring, what happens at the table and what to keep afterward.

This is general information from the CFPB, Freddie Mac and the Coffee County Register of Deeds, not legal or lending advice. Your purchase contract and your lender set the exact steps for your sale.

The week before closing

The CFPB suggests contacting your lender or closing agent at least a week before closing to find out how your Closing Disclosure will arrive: by email, by mail or through a website. The closing agent may be a title company, an escrow officer or an attorney, and the Closing Disclosure may come from either the lender or the closing agent, so ask who will send it.

Use this week to confirm:

Who is running your closing, plus the date, time and place. The CFPB closing checklist has a spot to write these down.
What to bring and how to pay. The CFPB checklist lists a cashier's check or a wire transfer as ways to pay the amount due at closing. Ask your closing agent which they accept.
Copies of the other documents. The CFPB suggests asking for the promissory note, the mortgage (also called the security instrument or deed of trust) and the deed in advance, at the same time as the Closing Disclosure.
Two trusted contacts. Save phone numbers for your agent and closing agent now. My wire fraud guide explains why you should never act on wiring instructions from an email alone.

The three business day Closing Disclosure rule

The CFPB says a Closing Disclosure is a five page form with the final details of your mortgage: the loan terms, your projected monthly payments and your closing costs. By law, you must receive it at least three business days before you close. That window gives you time to compare it to your Loan Estimate and ask your lender questions before you get to the closing table.

For this rule, a business day is not the same as a work day. Under the federal rule, 12 CFR 1026.2(a)(6), it means every calendar day except Sundays and federal legal public holidays, so Saturdays count.

What to check

The CFPB suggests you:

Find your most recent Loan Estimate and set it next to the Closing Disclosure.
Check the basic loan terms: loan amount, loan type, loan term, interest rate, monthly payment, whether there is a prepayment penalty, and whether you are paying points or receiving credits.
Compare the APR on the two forms. The CFPB calls this an easy way to see if your costs have gone up.
Look at the table at the top of page three of the Closing Disclosure. The CFPB says only certain costs can change by law.
Confirm your escrow account, if you have one, and that your personal information is correct.

The CFPB explains that some fees cannot increase at all unless you asked for a change to your loan or your financial information changed. Other fees can rise by no more than 10 percent, and a third group has no limit. If something looks different from what you expected, ask why.

What restarts the three day clock

Small changes do not usually delay closing. The CFPB says your lender must give you a corrected Closing Disclosure if terms change, but you get a new three business day review period for only three kinds of changes:

The APR becomes inaccurate. In its consumer explainer, the CFPB describes this as an APR increase of more than one eighth of a percentage point on a fixed rate loan, or more than one quarter of a point on an adjustable rate loan. A lower rate or lower fees does not cause a delay.
A prepayment penalty is added to the loan.
The loan product changes, for example from a fixed rate loan to an adjustable rate loan.

The CFPB says many other things can change in the last few days without a new waiting period, including typos, problems found on the walk through and most changes to payments at closing, including seller credits.

If you pay cash

The Closing Disclosure rules above apply to most mortgage loans. If you are paying cash, there is no lender Closing Disclosure, so ask your closing agent when you will see the final settlement figures and review them just as carefully. The CFPB also notes you will not get a Closing Disclosure for a few loan types, such as a manufactured home loan that is not secured by real estate; my manufactured and modular homes guide covers that difference.

The final walk through

The CFPB says that before you sign any papers, you should do a final walk through of the home. Make sure everything the seller agreed to repair has been repaired and anything the seller agreed to leave in the house is still in place. If it is not, the CFPB says to contact the seller immediately to talk it through, which I handle for my buyers. Freddie Mac also suggests confirming that the home is in the agreed condition and that the seller has completely moved out.

When and how the walk through happens depends on your purchase contract, so read those terms early and ask me to schedule it with you. Here is what I suggest bringing and checking:

Your contract and any repair agreement, so you can check each item against what was promised
Copies of repair receipts, if the seller agreed to provide them
Every item the contract says stays, such as appliances, fixtures or window treatments
Signs of new damage since your inspection, including on walls, floors and ceilings
Lights, faucets, toilets, heating and cooling, and appliances that are staying
Doors, windows and locks, plus keys, remotes and garage openers
Belongings or trash left behind, including in the garage, attic, crawl space and any outbuildings

Take photos of anything that is not right. My home inspection guide explains how repair requests work before this point.

If something is not right

The CFPB says things sometimes change a little in the last few days. For example, if the seller has not fixed something they agreed to fix, the seller might give you money toward your closing costs, called a seller credit, instead of making the repair before closing. As noted above, the CFPB says problems found on the walk through and most seller credit changes do not by themselves start a new three day review period. How a problem is resolved depends on your contract, and for legal questions a Tennessee real estate attorney is the right person to ask.

What to bring to closing

Based on the CFPB closing checklist and Freddie Mac, plan to bring:

A valid photo ID. Freddie Mac suggests a state issued photo ID, and the CFPB checklist lists your driver license or ID.
Your payment: a cashier's check or proof of your wire transfer for the exact amount due, as your closing agent instructs
Your Closing Disclosure, to compare with the final documents one more time
Proof of homeowners insurance and a copy of your purchase contract, both on the Freddie Mac list. My homeowners insurance guide explains what lenders usually require.
Anyone else who needs to sign, such as another borrower on the loan or a cosigner
Your checkbook, which the CFPB suggests in case of last minute changes
Your list of people to call, with the saved numbers for your agent and closing agent
A trusted friend, advisor or lawyer, if you want an advocate at the table, as the CFPB suggests

Ask your closing agent whether anything else is needed for your loan, and whether any documents need a notary.

What happens at the closing table

Freddie Mac describes closing, also called settlement, as the meeting where the final documents are signed, the closing costs are paid and ownership of the home is transferred to you. It says the paperwork can take a few hours.

The CFPB lists these as some of the most important documents at a purchase closing:

Closing Disclosure: your final loan terms and costs
Promissory note: your promise to repay the loan
Mortgage, security instrument or deed of trust: the document that gives the lender a claim on the home if the loan is not repaid
Deed: the document that transfers ownership of the property

In Tennessee there is also a state specific form. Under TCA 56 35 133, the person handling the settlement must get your separately signed statement, at or before closing, that you were told owner title insurance may be available and whether you want it. My title insurance guide explains the owner and lender policies.

Tennessee also charges a recordation tax when the deed and the mortgage are recorded. My buyer closing costs guide shows how the Tennessee Department of Revenue calculates it, and your Closing Disclosure will show the exact amounts.

Take your time

The CFPB is clear that you have the right to take your time and review every document, no matter who requires it. Its advice:

If things look different than what you were told or than your earlier documents, ask questions.
Do not sign anything until you are satisfied the documents match your expectations.
Ask your agent or settlement agent about the sale, and ask your lender about the loan.
Never sign blank documents or documents that describe a different deal than the one you agreed to.

The CFPB also asks you to get answers to a few practical questions at closing: how your property taxes and homeowners insurance will be paid, where to send your monthly payment, how to pay any homeowners association dues, and who to call with questions after closing.

You are not committed until you sign

The CFPB says you can always walk away at closing if you are not comfortable. It also warns that you might lose your deposit, face other consequences for breaking your purchase contract, and lose application or appraisal fees paid to the lender. Know what your contract says before you walk in. My earnest money guide explains when a deposit is usually at risk. The CFPB checklist marks the Right to Cancel form as refinance only, so it is not part of a home purchase closing.

Buying with someone else or serving in the military

The CFPB suggests you may want a real estate attorney to review the documents, for example to make sure the deed gives you the type of ownership you want if you are buying with another person. If you are an active duty servicemember, the CFPB says you can take your contracts to your installation legal office for a free review. My Arnold AFB relocation guide covers more for military buyers.

For sellers

Sellers sign at closing too, including the deed that transfers ownership. Your mortgage payoff, any other liens and your closing costs come out of the sale proceeds. Under CFPB rules, the seller may receive a separate Closing Disclosure from the buyer's. Plan to leave the home in the condition your contract requires and to leave behind everything the contract says stays, because the buyer will check both on the walk through. My seller closing costs guide explains payoffs, prorations and how to estimate your net proceeds, and my selling a house with a mortgage guide covers payoff statements, lien releases and escrow refunds.

After closing

The CFPB says to save your full closing packet, exactly as you received it, and to double check that it includes your Closing Disclosure, promissory note, mortgage and deed. It notes your Closing Disclosure can help at tax time, when you think about refinancing and when you sell.

The deed is recorded with the county. In Coffee County, the Register of Deeds office is at 1341 McArthur Street, Suite 2, in Manchester, (931) 723 5130. Its FAQ says copies of recorded documents can be requested in person or by mail, and documents recorded since January 17, 1990 can be viewed on TitleSearcher by subscription. The Register also offers a free Fraud Alert sign up, which my wire fraud guide describes.

The CFPB also warns new owners to:

Watch out for junk mail and scams. Once your deed and mortgage are public records, companies may use your name, lender and loan amount in mail that looks official. Do not assume mail with your lender's name is from your lender.
Update your address with your bank, credit cards, insurers, the post office and others.
Review your homeowners insurance and settle into your new budget before big projects.
Watch for servicing changes. If the company you pay changes, the CFPB says you will get a notice in advance.

My utilities guide covers getting power, water and internet set up in Manchester.

A closing week checklist

Ask how and when your Closing Disclosure will arrive
Compare it to your Loan Estimate as soon as it arrives
Confirm the closing date, time, place and how to pay
Confirm wiring instructions by calling a saved number, never from an email alone
Schedule the final walk through and bring your contract
Gather your photo ID, payment, insurance proof and contract
Bring everyone who needs to sign
Save your full closing packet afterward

How I help

I keep track of the dates in your contract, schedule the final walk through with you, and go through the Closing Disclosure with you side by side with your Loan Estimate so nothing surprises you at the table. If something on the walk through is not right, I work it out with the seller's agent before you sign.

Keep reading:

Fair housing note: I work with every buyer and seller and follow the same closing steps for everyone.

This guide is general information from public sources, not legal or lending advice. Rules and forms change, so confirm the details with your lender, your closing attorney or title company, and your purchase contract.

Getting ready to close in Manchester or Coffee County?

I can walk you through your closing timeline so there are no surprises. Call or text me at (615) 497 1658, or get my free buyer guide below.

Common questions

When do I get my Closing Disclosure?

By law, you must receive it at least three business days before closing, according to the CFPB. For this rule, business days include Saturdays but not Sundays or federal holidays. Compare it to your Loan Estimate right away.

What changes delay closing by three more days?

The CFPB says only three changes start a new three business day review: the APR becomes inaccurate, a prepayment penalty is added, or the loan product changes, such as from a fixed rate to an adjustable rate. Typos, walk through problems and most seller credit changes do not.

What is the final walk through?

A last visit to the home before you sign. The CFPB says to confirm that agreed repairs were made and that anything the seller agreed to leave is still there. Freddie Mac also suggests confirming the home is in the agreed condition and the seller has moved out.

What should I bring to closing?

Bring a valid photo ID, a cashier's check or proof of your wire for the exact amount due, your Closing Disclosure, proof of homeowners insurance and your purchase contract, plus anyone else who is on the loan. Ask your closing agent if anything else is needed.

Can I back out at the closing table?

The CFPB says you are not committed until you sign and can walk away if you are not comfortable, but you might lose your deposit, face consequences under your purchase contract and lose fees paid to the lender. Know what your contract says first.

What should I keep after closing?

The CFPB says to save the full closing packet as you received it, including the Closing Disclosure, promissory note, mortgage and deed. Your Closing Disclosure can help at tax time, when refinancing and when you sell.

Matt Sargent is a Tennessee licensed affiliate broker with Keller Williams who helps buyers and sellers in Manchester and Coffee County. Call (615) 497 1658 or send a message.