What happens at a mortgage closing?

This description concerns a home-purchase mortgage closing. The CFPB also calls closing settlement: the process where the parties sign the required papers. For a purchase, the loan closing and the home-purchase closing typically happen together. After that purchase closing, you become responsible for the mortgage and are required to repay the loan.

Who attends varies. The gathering may include a real-estate agent, a title company, an escrow company, your attorney or the seller's attorney in states that use attorneys, and sometimes the lender. In some states everyone signs at one table. In others, signatures are collected over days or weeks. Some companies allow electronic signatures, and a closing may be done by mail or online.

Read the documents before you sign. The CFPB says not to sign if the loan differs from what you expected, if you cannot make the payments, if you find errors, or if you do not understand the terms. An adjustable-rate payment can rise later. Even a fixed-rate loan's total amount due can change when taxes or insurance change.