Ultimate Guide to the House Closing Process

If the home-buying process is a marathon, then closing is the marathon’s final mile — but with hurdles between you and the finish. The good news? The finish line is indeed within sight. And armed with a bit of knowledge, you’ll easily leap those final hurdles on the way to being a homeowner.

How long does it take to close on a house?

Though every situation is different, most home closings take 30 to 60 days. When you submit an offer on a home, you and the seller have to agree to a timeline that makes sense for both of you. There’s a lot to do during the home closing process, from ordering the title to conducting inspections and getting your mortgage approved, all of which can take time.  

A typical house closing timeline

Some steps during the closing process can be checked off in a day, while others may take a couple weeks to finalize. Your house closing timeline and costs could look something like the table below.  

Your responsibilities during the home closing process

As the buyer, there’s a lot to do during the home closing process. Fortunately, your real estate agent, title agent and attorney (if you have one) can help guide you through each step. Here’s an overview of some of your responsibilities during closing. 

1. Submit your mortgage loan application

Regardless of whether you received pre-approval while shopping for a home, it’s now time to complete and submit your loan application. If you haven’t chosen a lender, use our guide to compare mortgage lenders and choose the one that’s best for you.   

Within a few days of submitting your application, the lender should provide you with a loan estimate. This estimate includes your contact information, the loan term, interest rate, closing costs, and other details. Review this carefully and contact your mortgage lender if you have questions or find any discrepancies. 

Final loan approval may take a few weeks. During this time, a lender appraisal (handled by the lender) ensures the property value aligns with the sale price. It’s also common for a lender to request additional information — be sure to respond promptly to any such requests. 

2. Lock your mortgage interest rate

When you receive loan approval, your lender will ask you if you want to “lock your rate.” A rate lock guarantees that you’ll receive a certain interest rate regardless of how rates change during the time of your lock. Depending on when you plan to close on a home, you can choose rate lock periods ranging from 30 to 60 days, and in some cases, up to 90 days.  

At AmeriSave, we offer a competitive 90-day rate lock so you have peace of mind knowing your interest rate won’t increase if rates rise during your home buying or closing process. 

3. Make sure your finances are ready

Buying a home is a significant investment, and between your closing costs and other expenses, coming up with the money is one of the key hurdles in this sprint to the finish. Here are the common costs you can expect to pay during the house closing process. 

• Earnest money: A typical earnest money deposit is around 1% to 2% of the sale price. At closing, this money is applied to your down payment or closing costs. 

• Lender appraisal fee: Expect to pay up to $500 for a home appraisal. 

• Home inspection fee: The cost of an inspection usually ranges from $300 to $500, but additional inspections for termites, radon, mold, and more can increase these costs. 

• Title insurance: Expect a premium of around $1,000 per policy. This is a one-time fee; coverage lasts for as long as you own the property. 

• Homeowners insurance premiums: The average cost of homeowners insurance is $2,377 per year, according to a report by Insurify. Premiums vary based on the value of the home, the location, coverage options, discounts, and claims history. 

• Property taxes: You may have to cover property taxes that are prorated for the remainder of the tax year. This cost varies, but your real estate agent can help you find out how much you’ll owe at closing. 

• Down payment: Conventional loans require a down payment of at least 3% of the sale price, though 20% is required to avoid private mortgage insurance (PMI). 

• Closing costs: These costs typically total around 3% to 6% of the loan amount. 

4. Choose a title company

A title company is a third party hired to facilitate a real estate transaction. Here’s a list of services title companies typically provide:  

• Conducting a title search on the property to check ownership disputes, unpaid liens, debts or outstanding taxes. 

• Providing title insurance to both the owner and you to protect your financial interests if any discrepancies arise after closing. 

• Setting up and managing an escrow account to hold funds until closing. 

• Managing the home closing process to ensure all paperwork and state-required documents are signed and funds are transferred to the seller.  

• Sending documentation to your county government office to record the deed.  

Though the buyer typically chooses the title company — and pays for the title insurance — this may vary depending on your location or circumstance. It’s also important to note that according to the Real Estate Settlement Procedures Act (RESPA), sellers cannot require buyers to use a certain title company as a condition of the sale. 

5. Deposit earnest money

If your purchase contract requires earnest money, you’ll deposit this into the escrow account, which is commonly held by the title company or a participating broker. This good-faith deposit represents your financial commitment to buy the home. If you decide to walk away from the sale for any reason not outlined in the agreement’s contingencies, the earnest money will go to the seller. 

6. Arrange for a home inspection

A home inspection is a third-party property assessment conducted by a dedicated professional. The inspection focuses on your home’s HVAC, plumbing, and electrical systems, as well as structural elements — such as the roof, foundation, and flooring — and any potential safety issues. The inspector will also look for signs of insect infestation or other damage that may impact the home’s value. 

You should receive a full written report of the inspector’s findings and recommendations. Hopefully, the report comes back clean, and you can move forward with the closing. However, if the inspection raises any issues, you can renegotiate the sales price, ask the seller to complete any repairs, or ask for a credit toward those repairs. If you’ve included an inspection contingency in the purchase agreement, you can even choose to cancel the sale and walk away with your earnest money. 

7. Review the closing disclosure

At least three days before closing day, you’ll receive a closing disclosure from your lender (they’re required by law to provide it). This five-page document outlines some of the key details of your mortgage, including the terms, interest rate, down payment, monthly payments, and other fees. 

Read this document carefully, and make sure the details match the loan estimate. Contact your lender immediately if you find any discrepancies or have questions. 

8. Buy homeowners insurance

Your mortgage lender will require you to buy homeowners insurance, which provides financial protection if your home is damaged or destroyed by fire, storm, wind, or other incidents. Be sure the coverage limit is based on the cost to rebuild (which may be significantly more than the sale price). An independent insurance agent or broker representing multiple insurance carriers can help you choose a policy that meets your needs. 

9. Conduct a final walk–through

A final walk-through is one of the last steps in the home closing process and provides you with one last chance to look at the property before closing day. Take this opportunity to make sure the seller has completed any requested repairs — including those resulting from the inspection report — and that the home is otherwise in the same condition as when you signed the purchase agreement.  

You’ll also use this time to ensure the seller has completely moved out and left anything they agreed to leave behind, such as appliances or certain furniture.   

Seller responsibilities during the home closing process

During the home closing process the seller must complete and sign a disclosure form that indicates whether the home has any known issues that might affect its value. Sellers must also complete a lead-based paint disclosure if the home was built before 1978. These disclosures provide you with even more information about the state of the home and limit your ability to sue the seller for any undisclosed issues.

1. Complete seller’s disclosure

A seller’s disclosure is a form that consists of questions about the state of the home and its systems, along with any defects. It asks about how the home was used, any changes that were made, and any problems the seller might know about.  

If there’s a roof leak or if the heater is broken, the seller is required to share that information on the seller’s disclosure. The seller’s disclosure will also include details about any past issues, along with any repairs or upgrades the seller has made.  

2. Complete requested repairs

As part of the house closing process, you can ask the seller to address any necessary repairs that come up during the home inspection. Buyers typically request fixes for safety hazards or major structural issues, such as a leaking roof, faulty wiring, or plumbing problems.  

Some sellers may offer repair credits instead, allowing the buyer to handle the work after closing. Your REALTOR® can help you negotiate the specific terms of repairs during closing. 

What happens on closing day

The home closing process concludes on closing day, when you’ll finally get the keys to your new home!  

At this point, all that’s left for you to do is cover the closing costs and your down payment, and sign the necessary paperwork. You’ll also have to show two forms of identification, and verify for your lender that you have homeowners insurance. Your real estate agent and a representative from the title company will be there to walk you through all the paperwork and answer any questions. 

What to bring on closing day

While you’ll probably spend most of your time reviewing and signing documents, you’ll need to bring the following to the closing table: 

• Two forms of identification, including one government-issued photo ID. 

• Cashier’s check for the closing costs and down payment. If you’re using a wire transfer, bring proof of the transaction. 

• Proof of homeowners insurance, such as your new policy’s declarations page. 

• Your copy of the closing disclosure. 

Don’t let hurdles become roadblocks

With the end of the home closing process so near — and homeownership practically within your grasp — you want to do all you can to close on time. This includes communicating with your lender to give them everything they need, avoiding changes to your financial situation and staying alert to possible scams. 

1. Answer lender requests as soon as possible

Be sure to respond to any questions or requests from your mortgage banker or real estate agent as quickly as possible to ensure a smooth closing process. It’s common for a lender to need additional information to document your income, debts, or savings. 

2. Avoid big financial changes

Keeping your finances steady is key to maintaining your loan eligibility and closing on time. Hold off on changing jobs, making big purchases, or taking out new loans until after closing to ensure a smooth process.  

3. Be aware of scams

Unfortunately, scammers try and capitalize on buyers lacking familiarity with the closing process. Wire transfer scams are one of the most common types of fraud, so make sure you call the title company directly by phone and verbally confirm you’re sending the money to the right place before transferring any funds. 

Closing the closing process

Now that the home closing process is complete, you’ll probably have your hands full with all the great things you’ve got planned for your new home. This is a great opportunity to make copies of all your closing documents and store them somewhere safe. Remember to always pay your mortgage on time, and if you have any questions about your new home loan, contact your AmeriSave mortgage specialist.  

FAQs 

What is the timeline for closing on a house?

The timeline for closing on a house can vary from a few weeks to a few months but is usually between 30 and 60 days.  

Why does it take so long to close on a house?

There are several reasons that closing on a house can take several weeks. Ultimately, it’s because the required inspections, title search, and mortgage are processes that take time. 

Who decides the closing date?

The closing date is the result of a negotiation between the buyer and seller. If the seller needs time to move out and relocate, the closing might take a bit longer, but if the buyer is in a hurry to move, the closing could occur in just a few weeks. It all depends on the specific situation.  

What should I not do when closing on a house?

When you’re preparing to close on a house, you shouldn’t do anything that might affect your ability to get your mortgage. Examples include changing jobs, purchasing big-ticket items, taking out new loans, missing payments on existing loans or failing to provide documents requested by your lender.