Buy a Home

Especially if you’re a first-time homebuyer, you might be wondering exactly what it means to close on a house. When you buy a home, closing is the last step in the process. It is when you finalize all the details of the transaction and sign the final paperwork on your loan.

One of the first questions many homebuyers ask is, “How long does closing take?” Closing on the purchase of a home can take anywhere from 7 to 60 days, and the timing depends on multiple factors.

According to the Ellie Mae Origination Insight Report, the average time to close a home in 2021 was 50 days.

Closing day is the day you sign the final paperwork on your loan. Expect to set aside 1.5 to 2 hours for the closing meeting. Buyers usually attend the closing meeting in person, but sellers can sometimes sign the paperwork ahead of time and don’t need to be in attendance.

During the closing meeting, you’ll sign documents and make your down payment; then, your lender will wire the balance of the sale price. Here’s how to prepare for your closing meeting:

What you’ll sign at closing:

• The promissory note, which commits you to repay the loan.
• The mortgage (may also be called the Deed of Trust or security instrument).
• The escrow disclosure detailing the fees incorporated into your monthly payments for taxes and insurance.
• A right-to-cancel form, allowing you three business days to back out of the deal.
• Other disclosures, disclaimers, and government-mandated documents.

What to bring to closing:

• Your government-issued ID, such as a driver’s license or passport,
• A cashier’s check for the amount of your down payment,
• Proof of homeowners’ insurance, and
• The purchase and sale contract.

In some cases, the sellers will hand over the keys on the same day as closing. Generally, however, sellers have 7 to 10 days to vacate the home after the closing date.

Your closing date can be pushed back (by days or weeks) if you encounter unexpected issues. Some things that might delay closing on a house include:

• Changes to your credit. If your credit score has been impacted by a significant change in income, making large purchases, or taking out other loans to affect your debt-to-income ratio (DTI), your credit may need to be re-evaluated by the lender, and this may delay closing.
• A low appraisal. If your appraisal comes in lower than the contracted sale price, you may need to renegotiate with the seller, which may delay closing.
• Title issues. If the seller of the home has unresolved liens, judgments, or ownership disputes on the home and these issues are uncovered during transfer of the house title, closing can be delayed.
• Home sale contingency. If your contract dictates that you can’t close on a new home until your previous home sells, your closing date may be delayed.

The amount you pay in closing costs will vary but commonly depends on three key factors:

• The price of the home
• The location of the home
• Whether you’re buying or refinancing

Marine Credit Union offers a variety of free budgeting and financial planning tools. Learn all about closing costs and use our free online calculator to calculate your home closing costs.

Usually, the buyer is responsible for paying closing costs, and the amount will vary from transaction to transaction.