What Occurs After I Close on My New Home?

If you have recently closed on your home, then congratulations are in order! Ideally, you were pre-approved for a mortgage loan, invested the time to find the right house, made it through negotiations, then cleared underwriting, inspections and more. With this life achievement unlocked, it’s time to celebrate and then look forward to the next phase of closing on your home: the post-closing process. It’s easy to focus on the pre-closing portion of the mortgage process. 

Afterall, this is where most of the hard work comes into play. If you have worked with Range Lening, then you know that we have helped:

1. You lock in the best rate possible.
2. Processed your loan.
3. Underwritten you loan.

The official close has passed and now it feels like all of the work is done, right?

Not quite.

There are a few things you should keep in mind about post-closing on your mortgage. When the documents are signed at the closing table, they will then need to be properly filed and/or mailed to the responsible party. This includes fees and payments. These funds are dispersed to all responsible parties to complete their end of the process.

As a necessary portion of this process, your documentation will be filed with the Registry of Deeds in the county where your property is situated:

• Property Deed – You will likely receive the property deed via mail when the process is completed. The deed records the transfer of ownership between the buyer, or previous owner, and the seller (the new owner). It includes a legal description of the property, the names and addresses of involved parties, and your signatures to confirm the exchange. The deed is actually a distinct document from the title. The deed is the official legal document that demonstrates who is the owner of the property. A title simply confirms ownership rights of the property.
• Deed of Trust – The deed of trust is placed with your lender. It shows that you agree to complete payment for your mortgage and confirms that the mortgage company holds the legal title to the property until your mortgage is satisfied, or paid in full.
• Power of Attorney – This is a document which grants a designee the right to act in your place to buy, sell or refinance your property. This is on file for if you are unable to perform the necessary tasks because you become incompacitated at any time.
• Title Insurance – Title insurance is an optional policy prepared by your title company to provide insurance against a competing claim for your property. This covers you from defects in the title of your property. It is a one-time fee payable at closing.

Once this documentation has been filed with the appropriate authority, then it is time to move on to the next phase of the post-closing process which is the servicing of your mortgage.

Servicing Your Mortgage

Once you obtain a mortgage for your new home, there is a key portion of the process that you must not forget: to pay your mortgage! When you work with a broker like Range Lending, the broker works to find the best mortgage option for you. How you pay your loan may vary with personal preference for items such as paying via a digital route such as a bank login, making a payment over the phone, or sending in a physical check. Often, the simplest route is to set up an automated monthly payment so that you won’t have yet another bill date to remember. 

Lastly, there are a few more items that you want to remember once you have setup the appropriate options for servicing your mortgage:

• File a homestead exemption – If your new home is your primary residence, then make sure to file a homestead exemption. This exemption lowers the taxable value of your home and decreases your taxes owed on the home. In Michigan, you must file a homestead exemption form, and the easiest route is to contact your local Tax Assessor’s office. 
• Verify pro-rated taxes – When you purchase a home, the previous owner is responsible for taxes for the time that they owned the home. When you acquire the home, you are then responsible for the remainder of the taxes on the home for the taxable year. This is typically completed at closing, but make sure that your taxes are accounted for one way or another.
• Mortgage tax deductions – Mortgage deductions are available in certain circumstances. Speak with your accountant or tax preparer to confirm that you are taking advantage of these deductions, particularly if you own a home for the first time or have taken out a mortgage where you did not previously have one.
• Escrow Analysis – Some people grow frustrated with a mortgage escrow analysis because, depending on conditions, it can mean a slight increase in your mortgage payment. Taxes and insurance can adjust during the year and this is typically what requires adjustments in your monthly escrow payment. The good news is that sometimes this can go down, as well.
• Bonus: Contest the tax value of your property – Local government determines a value for your home for which it is taxed. You have the right to appeal this appraisal decision by your local county. If you feel the appraisal is too high, you can appeal for a lower amount. Be ready to provide a justification, including, but not limited to a third party appraisal, comparables, or other details. Each county has a specific set of rules and deadlines, so work with your local county tax office to confirm everything.

As you can see, the post-closing of a mortgage still carries some weight and requires some work.

When you work with a dedicated mortgage broker like Range Lending, you can expect guidance for each step of the process. If your mortgage broker has done their work the right way, the post-closing process should be a continuation of smooth sailing. 

If you have any questions about the mortgage process or the mortgage post-closing period, please reach out to us at Range Lending for more information.