Closing

A day or so before closing, your lender and/or Realtor should provide you with a HUD statement. Basically, this is a break down of the funds required to close the transaction. One item that may grab your attention is the taxes area.

In most Indiana counties, taxes are paid every May and November. Taxes are also paid in arrears. What this means is that taxes are not due for nearly a year after occupying the home. Basically, if you own a home in 2004, your taxes would be due as follows.

All in all, the sellers have to provide you with the tax money for the time that they spent occupying the home. Therefore, you may have a credit on your closing costs as the seller's are paying you for their property taxes. When the property taxes become due, you will then be responsible for the full amount.

In most cases you won't even have to worry about the tax schedule. Most lenders also require that you open an escrow account for your taxes as well as your insurance. Again, your mortgage payment is larger, but that's only because the payment includes your mortgage, insurance, and tax expenses - 3 bills in one!!! If your mortgage is established in this manner, then the lender will pay the tax bill when it becomes due.

Also, before closing…..you and your Realtor will schedule a "walk through". Basically, this is a period where you walk through the home just to make certain that it is in the same condition agreed upon in the purchase agreement. Another thing to examine is any repairs that the sellers were required to complete from the inspection response. Most walk-throughs run fairly smoothly, but if something does arise, be sure and mention it to your Realtor.

At closing, you will most likely need to bring a cashiers check for the amount revealed in your HUD statement. The closing will probably take place at a closing agency or title company. This is a third party that has no affiliation with the buyer or seller and whose only purpose is to make certain that all of the legal paperwork is signed, filed, and completed correctly. There is a charge for this service, but most of the time it is split between buyer and seller and it is probably already included in your HUD statement.

Another thing that the closing agency may do is file any potential "tax exemptions" with the county recorder. There are a number of different exemptions that you can review. The most common qualifiers are mortgage and homestead exemptions. Basically, your taxes may be lower if you have a mortgage on the home or if you are occupying it as your primary residence, but check with your Realtor to see what exemptions might need to be filed in your case. Also, check with the closing agency or title company to be certain that they are going to file the exemptions.

One another note…..most closing agencies and title companies will also file your deed, mortgages, and other documents that may need to be recorded.

Finally, the closing occurs…..it's really just a huge paper fest where your signature falls on top of a number of legal documents. However, most closing agencies and title companies are VERY good about explaining what you are signing and why.

Keys are then handed over to the buyers.....and you are the proud owners of a new home.

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