17.4 Closing a Loan
17.4 Closing a Loan
Closing is where the loan is finalized and the real estate transaction is completed. In this topic, you’ll learn what typically happens at closing, how funds are handled, and what the borrower receives at the end of the process.
What Happens at Closing
Closing of a mortgage loan normally occurs at the same time as the closing of the real estate transaction. The lender typically deposits the funded loan amount with an escrow agent (or closing agent), along with instructions for disbursing the funds.
- The borrower deposits any required funds (down payment and closing costs) with the escrow/closing agent.
- The borrower executes final loan documents (and any other required closing paperwork).
- The closing agent disburses funds according to the instructions and settlement statement/closing disclosure.
Transfer of Title and Recording
Title to the property is transferred and recorded according to the legal procedures in effect at the time of closing. Recording helps protect the parties by providing public notice of ownership and lien interests.
What the Borrower Receives
After closing, the borrower receives a package containing copies of all documents relevant to the transaction. These typically include the signed loan documents and settlement disclosures.
Closing the Loan
Choose the best answer for each question, then select Check Answers.
Mortgage loan closing normally occurs:
Loan closing normally occurs with the closing of the real estate transaction.
At closing, the lender typically deposits the loan funds with:
The lender typically deposits funded loan amounts with an escrow/closing agent for disbursement.
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