Who Is at a Mortgage Closing, and When Not to Sign

Closing is the last step in buying and financing a home: the moment you and all the other parties sign the documents. The Consumer Financial Protection Bureau (CFPB) also calls it "settlement." Once you sign, you are legally required to repay the mortgage, so it helps to know who will be in the room, what the day can look like in your state, and when to stop and ask questions instead of signing.

1. What closing actually is

If you are buying with a loan, the CFPB says two things typically happen at the same time. The closing of your loan, when it becomes final and the money is distributed, and the closing of your home purchase, when you become the owner. After it is complete, you are responsible for the loan.

The CFPB's advice is direct: familiarize yourself with the key documents beforehand so you know what to look for.

2. Who you should expect to see

For a home purchase, the CFPB lists these people:

• You and any co-borrowers.
• The seller of the property or their agent.
• Your real estate agent and the seller's agent. They are not required to attend, but may come to make sure the transaction goes through.
• An escrow officer. In some states this person handles the funds that need to change hands. In other states the closing agent does that in addition to other duties.
• The closing agent, also called the settlement agent, who is responsible for the legal transfer of title and ownership from the seller to you.
• An attorney, in states that require one to handle the legal transfer of title and the exchange of funds.

The CFPB also notes the lender may or may not attend, and that the list can include your title insurance company, an escrow company, and the seller's attorney, depending on the transaction. Its tip is to get everyone's contact information ahead of time and bring a list of their phone numbers to closing.

If you are refinancing or taking out a second mortgage, fewer people are involved: you and any co-borrowers, a lender representative, your title insurance company, and an attorney.

3. It may not look like a table full of people

The CFPB says that, depending on your state, all the parties may sit around a table and sign everything at once. Or closing could take several weeks as signatures are collected from each party separately. Some companies allow electronic signing in advance of closing or at the closing table, and a closing may even be conducted by mail or online.

Check with the company handling your closing before you go. The CFPB says that in some states an attorney must be present, and other states may require an attorney to transfer the title.

4. When not to sign

The CFPB gives a short list of reasons to hold off:

• The loan is different from what you expected.
• You cannot make the payments.
• You find any errors.
• You do not understand the loan terms.

It also reminds buyers that payments can change over time. With an adjustable-rate mortgage, payments may increase, so you need to know when they can change and by how much. Even with a fixed-rate mortgage, your total monthly payment may change because of changes in your taxes or insurance.

5. Who pays the closing costs

The CFPB says that when you buy a home you generally pay all the costs of the transaction, though the contract or state law may have the seller cover some. The common charges it lists are appraisal fees, tax service provider fees, title insurance, government taxes, and prepaid expenses such as property taxes, homeowners insurance, and interest until your first payment is due.

The CFPB adds that a seller or lender credit toward these costs is not free: the seller will usually want a higher price, and the lender will typically raise your loan amount or your interest rate.

6. A short pre-closing checklist

1. Confirm who is handling your closing and whether your state requires an attorney.
2. Get names and phone numbers for the closing agent, escrow officer, lender contact, and your agent.
3. Compare your final numbers to your most recent Loan Estimate and ask about any differences.
4. Re-read your payment details, including whether taxes and insurance are included and how they could change.
5. Decide in advance what would make you pause, using the CFPB's four reasons above.

7. Key takeaways

• Closing is when you sign and become legally responsible for repaying the loan, per the CFPB.
• Who attends depends on your state. Some require an attorney, and some closings are done by mail or online.
• Do not sign if the loan differs from what you expected, you find errors, or you do not understand the terms.
• Closing-cost credits from a seller or lender are paid for through a higher price, a bigger loan, or a higher rate.
• Fixed-rate loans can still have payments that change when taxes or insurance change.

Closing procedures vary by state. This is general information, not legal or financial advice.